B.A. Ahammed and Others vs Sales Tax Officer, Hosdurg, Kasaragod District and Others

S. Siri Jagan, J.—The petitioner was an assessee under the Central Sales Tax Act, 1956. For the years 1971-72 and 1972-73, the petitioner was assessed to Central sales tax demanding a total amount of Rs. 50,435 as tax. The petitioner filed appeals against the assessment orders before the Appellate Tribunal. During the pendency of the appeals, since the petitioner did not pay the tax assessed and no stay was obtained from the appellate authority, the first respondent enforced the recovery and brought 1.88 acres of property belonging to the petitioner for sale for recovery of the amount. Since there were no bidders in the sale proceedings, the State Government purchased the property for paise 10 u/s 50(2) of the Kerala Revenue Recovery Act. According to the petitioner, the petitioner was not aware of these proceedings. Subsequently, one of the appeals was allowed and consequently, the amount payable by the petitioner was considerably reduced. Pursuant to that order of the appellate authority, no notice was issued to the petitioner for reassessment. Long thereafter, in 1998, the petitioner obtained encumbrance certificate in respect of the property and the petitioner found that, as per the encumbrance certificate, the State was the present owner of the property. The petitioner immediately approached the District Collector by filing exhibit P3 for reconveyance of the property after accepting the amounts due. By exhibit P4, the District Collector rejected the claim on the ground that as per the Government order on the subject, for reconveyance of the property, the party has to apply within two years from the date of confirmation of the sale, that is December 28, 1978 in this case. Against that order, the petitioner filed exhibit P5 appeal before the Government. The Government returned the appeal stating that the petitioner has to approach the Commissioner of Land Revenue. The petitioner approached the Commissioner of Land Revenue, who passed exhibit P8 order holding that an application for reconveyance after the expiry of one year from the date of confirmation of sale will not be entertained. It is under the above circumstances, the petitioner has filed this writ petition seeking the following reliefs : (i) A writ of certiorari or any other appropriate writ order or direction quashing exhibit P4 order.

(ii) A writ of mandamus or any other appropriate writ or order directing the respondents to re-convey 1.88 acres of the bought-in-land comprised in R. S. No. 294/2 of Muttathodi Village in Kasaragod District to the petitioner to meet the ends of justice after receiving the due amount to the Government.

(iii) A writ of declaration or any other appropriate writ or order declaring that fixation of cut-off date in exhibit P9 and P10 Government orders is arbitrary and unconstitutional.

(iv) An order of stay of all further proceedings pursuant to exhibit P4 order including that of taking possession of 1.88 acres of land in R. S. No. 294/2 of Muttathodi Village in Kasaragod Taluk from the petitioner.

The petitioner died during the pendency of the writ petition and his legal heirs have come on record as additional petitioners to prosecute the writ petition. 2. According to the petitioner, all along and even now the petitioner has been and is in possession of the property in question and insofar as, in view of the order of the Sales Tax Appellate Tribunal, the original order has been set aside, the sale pursuant to the original order, which is not in existence, itself is a nullity and, therefore, the petitioner is entitled to reconveyance of the property. The petitioner also contends that in view of the Division Bench decision of this court in District Collector, Alleppey and Others Vs. Subaida Beevi and Another, , the purchase of the property by the State of Kerala itself is illegal insofar as the sale is for realisation of the Central sales tax due to the Central Government and, therefore, going by the said decision, the purchase would be valid only if it is purchased on behalf of the Government of India, which has not been done in this case. In support of the contention that in view of the appellate order, the original order is completely wiped out, the petitioner relies on the decision of the Supreme Court in Income Tax Officer, Kolar and Another Vs. Seghu Buchiah Setty, .

A counter-affidavit has been filed by the second respondent, wherein it is stated that the property was attached as early as in 1977 and sale was confirmed on December 28, 1978. The petitioner approached the Government for reconveyance of the land only on May 18, 1998, after 20 years and, therefore, there is delay and laches on the part of the petitioner. They also support the impugned orders on the ground that the sale itself was validly conducted insofar as the petitioner has not obtained any stay of the assessment orders and, subsequent appellate orders will not affect the validity of the sale as such, which was conducted validly when the same was made.

I have considered the rival contentions in detail.

The original order of assessment was set aside by the Appellate Tribunal by exhibit P1 order. Pursuant to the appellate order, at least in respect of one appeal, the first respondent, as the assessing officer, was bound to issue fresh notice to the petitioner, compute the tax due in accordance with the appellate order and then issue a demand notice to the petitioner demanding the reduced tax due. The learned Government Pleader was not able to satisfy me that that procedure has been complied with and even today such situation continues. Therefore, I am of the opinion that the proceedings are still pending since, after the appellate order, the first respondent-Sales Tax Officer has not taken any steps for completing the assessment in respect of the one year in respect of which the appeal was allowed. The question as to whether a sale conducted validly pursuant to the impugned order becomes a nullity when subsequently the appellate authority sets aside the original order does not require to be considered in this writ petition in view of the peculiar facts and circumstances of this case, which are sufficient to give relief to the petitioner. There is no third party involvement in these proceedings. The Government themselves purchased the property of the petitioner for paise 10. Therefore, no right of third parties need be considered in this writ petition. Therefore, I am not going into the question as to whether the sale itself would be a nullity on the appellate authority setting aside the assessment order. In any event, in the decision of Income Tax Officer, Kolar and Another Vs. Seghu Buchiah Setty, , the Supreme Court has held that in case of an appellate order reducing the assessment, the original order goes and if it goes, the notice of demand also falls to the ground and the defaulter ceases to be a defaulter any more. Since subsequent to the appellate order, the first respondent has not issued any further notice and reassessed the tax due, the situation continues to be the same and there is no order of assessment even as on today. As such, the Government cannot rely upon the sale on the ground that the petitioner did not seek reconveyance of the property within two years. There is another illegality also in these proceedings. In the decision in District Collector, Alleppey and Others Vs. Subaida Beevi and Another, , a Division Bench of this court has held that when the Government purchases the property u/s 50(2) for recovery of the amounts due to a requisitioning authority, the Government has to purchase the property in the name of the authority to whom the amount is due and not in the name of the Government. Here the amount is due to the Central Government as is clear from section 9 of the Central Sales Tax Act. Therefore, for the sale to be valid, the Government should have purchased the property in the name of the Central Government. That has not been done in this case. I am of opinion that even otherwise, on considerations of equity also, the legal heirs of the petitioner are entitled to reconveyance of the property, notwithstanding the long delay in approaching the Government for reconveyance, which is in the peculiar facts and circumstances of this case. A democratic Government cannot take a shylockian attitude in such matters, especially when the sales tax authorities have also not done what they ought to have done after the appellate order. The Government Pleader was not able to satisfy me that the Government has actually taken possession of the property, since no document had been produced in respect of the same. The petitioner has stated in the writ petition that he continued to be in possession of the property even after the sale, about which, he was not aware and had no notice of. Therefore, I am of the opinion that on the legal heirs of the petitioner paying the amounts due as per the appellate order, they are entitled to reconveyance of the property. Accordingly, this writ petition is disposed of with the following directions. The first respondent is directed to pass fresh orders in accordance with exhibit P1 order of the Sales Tax Appellate Tribunal within one month from the date of receipt of a certified copy of this judgment with notice to the legal heirs. If the legal heirs of the petitioner pay the amounts due as per the said assessment with interest at statutory rate till payment and meet the expenses for reconveyance, the property shall be reconveyed to the legal heirs of the original petitioner notwithstanding the fact that the petitioner did not apply within two years. The demand as directed above shall be served on the legal heirs of the original petitioner after completing the revised assessment as per the appellate order, by the first respondent within one month from the date of receipt of a certified copy of this judgment and the legal heirs of the petitioner shall pay the amounts so assessed within one month thereafter. On the legal heirs of the petitioner paying the said amounts, the property shall be reconveyed by the Government to the legal heirs of the original petitioner at their expense, within another three months from the date of payment.