Allowed

Lakshmi Hotels and Resorts v. Depiuty Tahsildar (Rr).

Kerala HC4 Dec 2018WP(C)/14732/2013

Case brief

AI extract

What is this about?

This writ petition challenged the levy of collection charges and revenue recovery proceedings for luxury tax arrears. The Court held that collection charges cannot be realized when arrears are paid directly to the requisitioning authority or under an OTS scheme, and the defaulter should not be overburdened. Consequently, the Court ordered the refund of Rs.9,40,55/- along with interest.

What did the court decide?

Respondents directed to refund Rs.9,40,55/- within three months; amount to carry interest at 7% per annum from 01.04.2013.

Lakshmi Hotels and Resorts Vs Depiuty Tahsildar (Rr). — Banking and Recovery | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE SMT. JUSTICE P.V.ASHA

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TUESDAY ,THE 04TH DAY OF DECEMBER 2018 / 13TH AGRAHAYANA, 1940

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WP(C).No. 14732 of 2013

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PETITIONER/S:

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LAKSHMI HOTELS AND RESORTS, KUMARAKOM, KOTTAYAM

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REPRESENTED BY ITS MANAGING PARTNER

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SRI.SASIDHARAN.V.B.

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BY ADVS. SRI.AJI V.DEV SRI.SUSHANTH.J.

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RESPONDENT/S:

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1 DEPUTY TAHSILDAR (REVENUE RECOVERY). TALUK OFFICE, KOTTAYAM-686 001.

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2 TAHSILDAR (REVENUE RECOVERY) TALUK OFFICE, KOTTAYAM-686 001.

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3 THE DEPUTY COLLECTOR (REVENUE RECOVERY) OFFICE OF THE DEPUTY COLLECTOR (RR), KOTTAYAM-686 002.

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4 THE DISTRICT COLLECTOR KOTTAYAM-686 002.

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BY ADV.

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SRI.K.J.MOHAMMED ANZAR,SPECIAL GOVT.PLEADER

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04.12.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 14732 of 2013

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JUDGMENT

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The petitioner is challenging the demand

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made by the respondents for collection charges and the Revenue Recovery proceedings initiated against it for recovering the amount towards arrears of Kerala Tax on Luxuries Act.

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2. The petitioner is a partnership firm engaged in the business of hotels. The 1^st respondent had issued a demand notice under Section 7 of the Revenue Recovery Act demanding arrears under Luxury Tax Act for the year 2005-06 along with collection charges @ 5% for arrears up to 5 lakhs and @ 7.5% for arrears above 5 lakhs.₹ ₹ The total amount demanded towards arrears was a sum of Rs.5,73,379/-.

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3. The petitioner submits that 2^nd respondent had already demanded a sum of Rs. 2,66,955/-. The case of the petitioner is that it had already remitted a sum of Rs.13,348/- towards collection charges as per Ext.P2 receipt dated 31.01.2013.

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WP(C).No. 14732 of 2013

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Petitioner also claims that the 2^nd respondent had collected another sum of Rs.9,875/- while balance arrears of a sum of Rs.1,97,307/- was paid as per

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Ext.P3 receipt. It is also stated that as per

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Ext.P4 series, 2^nd respondent had demanded arrears of Luxury Tax for the year 2007-08, 2008-09 and 2009-10. Petitioner also submits that it had as per Ext.P5 letter informed the 2^nd respondent that realisation of collection charges is contrary to judgments of this Court in Cochin Port Trust v. State of Kerala : 2008 (1) ILR 718 ; M/s.S.B.Tex v. C.T.O. Wadakkancherry & Others in W.P.(C) No.16753/2012 etc. Even after this, the 2^nd respondent issued another notice Ext.P7 demanding a sum of Rs.9,44,555/- towards penalty along with collection charges of Rs.70,842/-. This writ petition is filed as no positive action was taken even after submitting Ext.P8 representation.

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4. In the counter affidavit of the

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respondents, it is stated that the petitioner was

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WP(C).No. 14732 of 2013

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liable to remit the Revenue Recovery collection charges and cost of process along with Revenue Recovery arrears as specified in Section 5 of the Kerala Revenue Recovery Act as provided in G.O(P) No.239/2004/RD dated 15.07.2004, as Demand Notices under Sections 7 and 34 were already issued. According to them, the judgment relied on by the petitioner cannot be a general yardstick for not collecting collection charges. It is also stated

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that as per the judgment in Writ Appeal No.578/2012, there is no illegality in collecting collection charges.

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5. The Division Bench of this Court in Deputy

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Tahsildar (RR) v. Vijaya Builders : 2016 (1) KLT

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684 has considered the question whether collection charges could be realised when no recovery was effected by way of Revenue Recovery proceedings. After interpreting the provisions contained in

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Section 5 of the Revenue Recovery Act and considering the contentions raised by the Revenue

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WP(C).No. 14732 of 2013

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Authorities, it was held that when payment is made directly to the requisitioning authority or when payments are made under an OTS Scheme, the collection charges cannot be realised. It was held that a defaulter cannot be over burdened by realising the collection charges when he pays the arrears.

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6. As far as the present case is concerned, the recovery was sought to be made towards the arrears due to the Commercial Tax Department which

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is under the Government. The respondents cannot therefore be heard to say that they require charges for collection of the arrears of tax due to another department under Government. Moreover petitioner had paid the arrears before any coercive proceedings commenced.

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7. In the above circumstances, the collection charges realised from the petitioner on 31.01.2013, 02.03.2013 and 26.03.2013 i.e., the total amount of Rs.9,4055/- realised from the

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WP(C).No. 14732 of 2013

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petitioner is liable to be refunded. As the respondents were illegally retaining the amount remitted by the petitioner towards the collection charges, petitioner would be entitled to interest also.

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Accordingly, there shall be a direction to the respondents to refund the aforesaid amount of Rs.9,4055/- within a period of 'three months' from the date of receipt of a copy of the judgment. The amount will carry interest 7% per annum from 01.04.2013 onwards.

Sd/-

P.V.ASHA JUDGE

ww/AS

WP(C).No. 14732 of 2013

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1	A TRUE COPY OF THE DEMAND NOTICE DATED 14/1/2013.
EXHIBIT P2	A TRUE COPY OF THE CASH RECEIPT IN FROM TR-5 DATED 31/1/2013.
EXHIBIT P3	A TRUE COPY OF THE CASH RECEIPT IN FORM TR-5 DATED 2/3/2013.
EXHIBIT P4	A TRUE COPY OF THE DEMAND NOTICE FOR 2007-08 DATED 16/2/2013.
EXHIBIT P4(A)	A TRUE COPY OF THE DEMAND NOTICE FOR 2008-09 DATED 16/2/2013.
EXHIBIT P4(B)	A TRUE COPY OF THE DEMAND NOTICE FOR 2009-10 DATED 14/1/2013.
EXHIBIT P5	TRUE COPY OF THE LETTER SUBMITTED TO THE 2ND RESPONDENT DATED 18/3/2013.
EXHIBIT P6	TRUE COPY OF THE JUDGMENT IN COCHIN PORT TRUST VS.STATE OF KERALA
EXHIBIT P6(A)	TRUE COPY OF THE JUDGMENT IN M/S.S.B.TEX VS. C.T.O WADAKKANCHERRY AND OTHERS.
EXHIBIT P7	A TRUE COPY OF THE CASH RECEIPT IN FORM TR-5 DATED 26/3/2013.
EXHIBIT P8	A TRUE COPY OF THE LETTER DATED 8/4/2013 FLED UNDER THE RTI ACT.
EXHIBIT P9	A TRUE COPY OF THE REPLY ISSUED ON RTI QUERY DTED 18/4/2013.

Lakshmi Hotels and Resorts v. Depiuty Tahsildar (Rr).

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Lakshmi Hotels and Resorts v. Depiuty Tahsildar (Rr).

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