Karnataka High Court
Ali Agro Extract Pvt. Ltd. vs Assistant Commissioner Of Commercial ... on 7 October, 2003
Equivalent citations: [2006]146STC373(KAR), 2004 AIR - KANT. H. C. R. 118, (2003) 55 KANTLJ(TRIB) 322
Author: R. Gururajan
Bench: R. Gururajan
ORDER R. Gururajan, J.
1. All Agro Extract Pvt. Ltd., is before me challenging the recovery proceedings initiated by the respondent-State.
2. The admitted facts reveal that the petitioner has suffered heavy losses and accordingly closed his business in the year 2001. The petitioner says that the Karnataka State Finance Corporation has taken the custody of the factory and employed their security men by locking the doors of the factory where even the petitioner is not allowed to visit the factory premises. This is done by the Karnataka State Finance Corporation towards non-payment of the loan by the company. The State Bank of Mysore according to the petitioner has referred the matter to Debt Recovery Tribunal, which is pending.
3. The petitioner admits that the company is liable to pay the arrears of tax towards outstanding amounts. The arrears of sales tax pertaining to the petitioner has been referred to the Special Judicial Magistrate, First Class, and the same is pending. In the meanwhile the respondent also initiated recovery proceedings through the Tahsildar by way of land revenue proceedings. Therefore, the petitioner is before me challenging the recovery proceedings initiated by the respondent-State.
4. The learned Counsel for the petitioner invites my attention to the pending proceedings before the Magistrate and pending proceedings before the Tahsildar. In the matter of recovery proceedings the learned Counsel for the petitioner submits that there cannot be two parallel proceedings. The learned Counsel also submits that the property of the managing director is being attached in these proceedings.
5. Admittedly the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1979 (for short, "the Act") provides for payment and recovery of tax. Sub-section (4)(a) of Section 8 provides for recovery from a dealer without prejudice to any other mode of collection be recovered, and it reads as under:
(a) as if it were an arrear of land revenue; or
(b) by attachment and sale or by sale without attachment of any property of such dealer or any other person by the prescribed officer in accordance with such Rules as may be prescribed;
(c) notwithstanding anything contained in the Code of Criminal Procedure, 1973 (Central Act 2 of 1974), on application to any Magistrate, by such Magistrate, as if it were a fine imposed by him:
6. Section 8(4)(a) is similar to Section 13 of the Karnataka Sales Tax Act, 1957. Section 13 is similarly worded and it also provides for recovery in identical manner.
7. A careful reading of Section 8(4)(a) would show that the authorities are at liberty to recover the tax by way of collection without prejudice to any other mode of collection. Three modes are prescribed in terms of Section 8(4)(a) of the Act. First mode is by way of land revenue proceedings, second is by way of attachment proceedings and sale or by sale without attachment and the third mode is recovery proceedings through criminal court. There is no prohibition Under Section 8(4)(a) of the Act in terms of the statute thereby prohibiting the respondent from recovering the tax both by way of land revenue proceedings as well as by way of complaint to criminal court. There is no estoppel in the statute and in the matter of recovery. In the given circumstances, the petitioner's contention of parallel proceedings cannot be accepted.
8. This view of mine is supported by the judgment (Basettiyavar Company v. Commercial Tax Officer, Haveri). That is a case in terms of the recovery proceedings under the sales tax case. A learned Judge of this Court has considered this very submission in paragraph 14, which reads as under:
The courses of action available to recover the amount are not mutually exclusive. One or the other, though not simultaneously, could be pursued till the amount is recovered. The authority may take recourse to a particular mode of execution up to a particular point and, before the amount is fully recovered abandon that course and take recourse to the other method. It cannot be said that by the assessing authority proceeding in that way the assessee, in any manner, has been prejudiced. The duty of the assessee is to satisfy the demand. It cannot be said that the assessee, in the instant case, after receiving the demand notice, as referred to above, had altered his position and thereby the action taken now works to his detriment. His liability, in no way, can be said to have been diminished or increased by the conduct of the assessing authority.
9. The petitioner's next submission is that the family members of the managing director are being harassed by the respondent. I am unable to accept this submission. No factual foundation is laid to accept this submission. The petitioner is the managing director and the petition is not filed in his personal capacity. Therefore, this argument cannot be accepted.
10. No grounds. Petitions stand rejected.