IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 34471 of 2007(D)
1. CENTRAL BANK OF INDIA,
... Petitioner
Vs
1. M/S.N.J.SAW MILLS, ERAVIPURAM,
... Respondent
2. BABUJI, N.J.NIVAS, EARVIPURAM,
3. TAHSILDAR (RR), KOLLAM.
For Petitioner :SRI.DEVAN RAMACHANDRAN
For Respondent : No Appearance
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :10/12/2007
O R D E R
ANTONY DOMINIC, J.
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W.P.(C) No. 34471 OF 2007 D
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Dated this the 10th December, 2007
J U D G M E N T
The direction sought for in this writ petition is to restrain the
3rd respondent from taking steps to sell the properties mentioned in
Ext. p1 for the realisation of dues of M/s. J.B. Industries owned by
the 2nd respondent before proceeding to sell the properties as
directed in Ext. P7 judgment of this Court in W.P.(C) No. 8208/07.
Petitioner, a Nationalised Bank, has advanced substantial amount to
the 1st respondent and pursuant to the default committed by the 1st
respondent it had filed O.A. No. 320/01 in which sale certificate was
obtained from the Debts Recovery Tribunal.
2. It is stated that when steps were taken for realising the dues
by sale of the mortgaged properties, the 3rd respondent informed
that the property has been attached under the Revenue Recovery Act
and sale notice also has been issued by the 3rd respondent. Such
steps by the 3rd respondent were for realising the sales tax dues of
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more than Rs.5 lakhs.
3. At that stage, though the writ petitioner filed W.P.(C) No.
8208/07 that was disposed of by this Court by Ext. P7 judgment
directing the Bank to file a claim petition before the Tahsildar (RR).
Accordingly, the Bank lodged the claim and the same has been
rejected by Ext. P9 stating that the sales tax dues has priority over
other debts. It is in the above circumstance the petitioner proceeds
on the basis that the liability is that of M/s. J.B. Industries owned by
the 2nd respondent and that since the 2nd respondent is one of the
mortgagees of the properties covered by Ext. P1, the Sales Tax
Department has initiated proceedings as against those properties.
4. When this writ petition came up for orders, in view of the
contentions raised in the writ petition, the case was adjourned with
a direction to the learned Govt. Pleader to obtain instructions in the
matter. On instruction, today the learned Govt. Pleader submits that
the defaulter is none other than the 1st respondent itself and not
the 2nd respondent as wrongly pleaded by the petitioner. It is
submitted that the 1st respondent has defaulted the sales tax dues
for the assessment years 1997-98 and 1998-99 and that the dues
is more than Rs.5 lakhs plus interest. It is contended that the sales
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tax dues have priority in view of the provisions contained in Section
26A of the KGST Act.
5. Now that the respondents have categorically stated before
this Court that the 1st respondent is the defaulter and not the 2nd
respondent, the 3rd respondent is perfectly justified in proceeding
against the assets of the 1st respondent. It may be true that the
properties have been mortgaged to the petitioner Bank, but then by
operation of the statutory provisions, the liability that is due to the
Sales Tax Department has priority over the other dues. If that be so,
the revenue recovery proceedings initiated by the 3rd respondent
cannot be faulted and if so the writ petition is only to be dismissed
and I do so.
ANTONY DOMINIC
JUDGE
jan/-