IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 5.11.2009
Coram
The Honourable Mr.Justice K.K.SASIDHARAN
W.P.No.15290 of 2000
K.S.Udayakumar ...Petitioner
-vs-
1. The State of Tamil Nadu
rep.by its Commissioner and Secretary,
Prohibition and
Excise Department, Fort St.George
Chennai-9.
2. Divisional Excise Officer
Kancheepuram at Kancheepuram.
3. Divisional Excise Officer
Egmore-Nungambakkam
Chennai-8. ...Respondents
Petition under Article 226 of the Constitution of India praying to issue a writ of Certiorari calling for the records relating to Rc.No.307/9K dated 9.8.2000 on the file of the second respondent and to quash the same.
For Petitioner : Mr.A.S.Narasimhan
For respondents : Mr.S.Gopinathan, AGP (W)
for RR1 to 3.
------
ORDER
This writ petition is directed against the proceedings dated 8 August, 2000 on the file of the second respondent initiating proceedings under the Tamil Nadu Revenue Recovery Act, 1894 to realise the excise arrears from the petitioner.
THE FACTS:-
2. The petitioner is the son of late K.L.Sundaram, who was the excise licensee of Toddy Shop bearing No.1 for the year 1972-73. Since he failed to pay the kist for November, 1972, there was a re-auction and as the amount fetched in the re-auction was much below the original bid amount which was the agreed kist by K.L.Sundaram, notional loss was assessed and he was directed to pay a sum of Rs.2,24,250/-. The said Sundaram died on 16 August, 2000 and subsequently the respondents initiated proceedings against the petitioner for recovery. According to the petitioner the respondents were not entitled to initiate proceedings under the Revenue Recovery Act as the Tamil Nadu Prohibition Act does not contain provisions for invoking the Revenue Recovery Act for the purpose of realisation of the revenue arrears. The petitioner further contended that deceased Sundaram had no separate property of his own and as such the respondents were not justified in initiating action against the petitioner on the premise that he was the beneficiary of the assets left by the deceased. However the respondents were determined to proceed against him invoking the Revenue Recovery Act which made him to file the writ petition.
3. The second respondent has filed a counter wherein it was stated that the Toddy shop bearing No.1 of 1972-73 was taken on lease by late K.L.Sundaram. However he failed to remit the kist for the month of November, 1972 which made the Excise Department to conduct a re-auction on 17 March, 1973. In the re-auction so conducted, the Excise Department could realise only a sum of Rs.10,509/- as monthly kist and as such there was a loss to the revenue which was quantified at Rs.2,08,892/-. The said amount with interest would come to Rs.2,24,240.51 and the petitioner being the son of deceased K.L.Sundaram is liable to pay the said amount as he received considerable property left by his father.
4. The second respondent has also stated that Recovery Action was taken against deceased Sundaram to realise the kist arrears. However he evaded payment and subsequently filed a writ petition in W.P.No.4541 of 1978 and obtained an interim stay against recovery. However the writ petition was ultimately dismissed on 16.7.1981. The Government has also given concession in the matter of payment of kist amount and the said concession was also not made use of by K.L.Sundaram. Since the petitioner was given substantial property by his father he was also liable to pay his debts and accordingly the second respondent justified the action taken to collect the arrears from the writ petitioner.
DISCUSSION:-
5. The auction for granting the parting privilege for conducting Toddy Shop for the year 1972-73 was held on 4 July, 1972. The father of the petitioner K.L.Sundaram was the highest bidder for a sum of Rs.4,08,000/- . He has paid advance of two months lease amount quantified at Rs.66,800/-. Subsequently there was default, which made the excise department to take steps for re-auction. Accordingly re-auction was conducted and in the said re-auction monthly kist amount was drastically reduced. The Excise Department received the offer at the rate of Rs.10,509/- as monthly kist and the bid offered in the re-auction was accordingly confirmed. The loss sustained by the department was calculated and it was found that a sum of Rs.2,08,892/- was due from the original lessee by way of notional loss.
6. When the Excise Department found that the lessee was not prepared to pay the notional loss, recovery proceedings were initiated. In the meantime the lessee K.L.Sundaram filed a petition on 7 January, 1977 before the Collector of Madras praying to absolve him from liability. The matter was considered by the Collector and after giving an opportunity of hearing to the lessee, the request was rejected as according to the Collector there was no reason for giving any kind of remission for the period in question.
7. Subsequently the lessee Mr.Sundaram filed a writ petition before this Court in W.P.No.4541 of 1978 to quash the order dated 12 June, 1978 on the file of the Collector of Madras rejecting the request made by him to absolve him from liability. The writ petition was dismissed by this court as per order dated 16 July, 1981. While dismissing the writ petition, learned Judge of this Court observed that the objections filed by the petitioner in the said writ petition was intended to evade and postpone realisation of the amount by the State and as huge amount was involved in this matter, any further delay would act against public interest. In fact the learned Judge was of the view that the very writ petition was an abuse of process of the Court.
8. Since the challenge to the substantive proceedings determining the notional loss and rejection of the request of the licensee to absolve him from liability was rejected by this court as per order dated 16 July, 1981 in W.P.No.4541 of 1978 it is not possible for the petitioner to dispute the liability. The notional loss was assessed by the excise authorities and the assessment has become final in view of the order passed by the Collector dated 12 June, 1978 which was confirmed in W.P.No.4541 of 1978. Therefore it is no longer open to the petitioner to contend for the position that the respondents were not entitled to recover the notional loss.
9. The next question is as to whether the petitioner is liable to pay the amount. In case the petitioner has received property from his father the respondents were fully justified in initiating proceedings for recovery by attachment and sale of those properties. In any case, before proceedings against the petitioner, the second respondent has to consider the issue as to whether they can proceed against the petitioner and as to whether there was any property left by the deceased K.L.Sundaram to be inherited by the petitioner so as to enable them to recover the excise arrears. However there is nothing on record that the respondents have considered the question of inheritance and consequential liability of the petitioner to pay the excise arrears.
10. The order impugned in this writ petition is only an order of recovery. The liability of the petitioner as well as the extent of liability were not indicated in the impugned order. Similarly no opportunity was given to the petitioner before initiating recovery action. Therefore I am of the view that the matter requires fresh consideration by the respondents.
11. In the result, the impugned order dated 8 August, 2000 is quashed. The respondents are granted liberty to initiate fresh proceedings against the property left by the deceased lessee with notice to the petitioner. The scope of enquiry would be limited to the extent of liability of the petitioner as the notional loss has already been assessed and the order of assessment has become final.
12. The writ petition is allowed as indicated above. No costs.
5.11.2009
Index: Yes/No
Internet: Yes/No
Tr/
K.K.SASIDHARAN, J
Tr
To
1. The State of Tamil Nadu
rep.by its Commissioner and Secretary,
Prohibition and
Excise Department, Fort St.George
Chennai-9.
2. Divisional Excise Officer
Kancheepuram at Kancheepuram.
3. Divisional Excise Officer
Egmore-Nungambakkam
Chennai-8.
W.P.No.15290 OF 2000
5.11.2009