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2024 DIGILAW 670 (KER)

S. Sidhiq v. State Of Kerala

2024-06-19

HARISANKAR V.MENON

body2024
JUDGMENT : The petitioner has filed this writ petition challenging Exts. P10 and P11 Revenue Recovery notices issued by the 5th respondent herein by which an amount of Rs.4,93,992/- is sought to be recovered solely on the basis of certain audit objections raised by the 4th respondent herein. 2. Short facts necessary for the disposal of this writ petition are as follows: The petitioner, who claims to be the owner and in possession of 20 cents of land comprised in Sy. Nos.1692/8 & 9 of Nedumangad Village and Taluk, constructed a 3 storeyed building in the said property, on the basis of a building permit issued by the local authority. After the construction was completed, on 28.01.2002, the Village Officer, Nedumangad, issued a notice to the petitioner, pointing out that 2 pillars of the building-1st and 11th-are abutting the puramboke land by 20cms. Therefore, the petitioner submitted an application to the 3rd respondent for assigning that portion of that land allegedly encroached on and used by him. Later, it was pointed out that the petitioner applied for a lease under Rule 12 of the Assignment of Land Within Municipality and Corporation Areas Rules, 1995 (hereinafter referred to as ‘the Rules’ for short). By Ext. P1 order, the 3rd respondent granted sanction of lease of 1.64 cents of land. The rent payable was fixed at 10% of the market value of the land. Altogether, an amount of Rs.1,80,192/- was demanded from the petitioner. It is pointed out that on receipt of Ext. P1, the petitioner submitted Ext. P2 appeal before the 2nd respondent herein. Along with the filing of the appeal as above, an amount of Rs.25,000/- is remitted by the petitioner. 3. The appeal filed, as above, is disposed of by the 2nd respondent herein by Ext. P5 order dated 01.12.2005. In this order, the 2nd respondent has found as under: “Findings: 1. The appellant need be assessed lease rent and prohibitory assessment only from 1.9.98 as there is no proof that he has been in occupation of the above property prior to that date. 2. The market value of the property fixed is too high as it is not on the road side but is a thodu puramboke. Therefore a value of Rs.25,000/- would be fare. 2. The market value of the property fixed is too high as it is not on the road side but is a thodu puramboke. Therefore a value of Rs.25,000/- would be fare. ORDER In the light of this findings, the Tahsildar may reassess the lease rent payable by the lease holder.” It is also pointed out that the amount payable is reassessed by the 5th respondent on the basis of Ext. P5 and the petitioner is directed to pay Rs.542/- more, apart from Rs.25,000/- already paid. 4. Later, the 4th respondent carried out an audit and observed that the findings in Ext.P5 order by which the amount payable was re-worked may not be correct. According to the 4th respondent, the amount payable towards prohibitory assessment/fine would be Rs.4,93,992/- calculated for the period from 01.01.1986. This is reflected in Ext.P6 letter of the 2nd respondent addressed to the Principal Secretary, Revenue Department, seeking guidance in the matter. The Government addressed the 2nd respondent by Ext.P8 dated 25.05.2011, directing the 2nd respondent to substantiate his stand with the 4th respondent herein and to get the objection dropped. However, by Exts P10 and P11, recovery proceedings were taken by the 5th respondent herein, which compelled the petitioner to file this writ petition. 5. A counter affidavit dated 22.05.2013 is filed by the 4th respondent, wherein it is pointed out that the findings in Ext.P5 are not acceptable, since the petitioner has admitted that he had possession of the land ‘puramboke’ from 1986 onwards, as seen from the letter dated 27.01.2005, produced as Ext.R4 (a). The counter affidavit also makes detailed reference to the calculation by the 4th respondent. Another counter affidavit dated 11.06.2015 is also filed by the 1st respondent, justifying the proceedings initiated. 6. I have heard Sri.B. Raghunathan, learned counsel appearing for the petitioner and Smt.Rashmi K. M., the learned Senior Government Pleader representing the respondents. 7. The learned counsel for the petitioner contends that the recovery proceedings taken solely on the basis of audit objections is not correct, especially when the petitioner is only expected to go by the findings in Ext.P5 order. The learned Government Pleader makes reference to the counter affidavit and the supporting documents to contend that the calculation by the 4th respondent is correct. 8. I have considered the submissions made by both sides, as also, the connected records. The learned Government Pleader makes reference to the counter affidavit and the supporting documents to contend that the calculation by the 4th respondent is correct. 8. I have considered the submissions made by both sides, as also, the connected records. The petitioner, in this writ petition, challenges the revenue recovery proceedings initiated by Exts.P10 and P11 notices. It is the admitted case that the revenue recovery steps are initiated solely on the basis of the audit objections. The 4th respondent, it appears, has not accepted the findings contained in Ext.P5. Here, it is to be noticed that the petitioner has filed the application for lease, leading to the issuance of Ext.P1 under the provisions of the Rules. Against Ext.P1, the petitioner preferred Ext.P2 appeal, which led to the issue of Ext.P5 order by the 2nd respondent. The appeal as above is filed by the petitioner under the provisions of Rule 18 of the Rules, which reads as follows: 18. Appeal.—(1) An appeal shall lie to the Board of Revenue against and order passed by the Assigning Authority or to the Government against an order passed by the Board of Revenue, as the case may be. (2) The appeal shall be filed within 30 days of receipt of the order by which the appellant is affected: Provided that, the appellate authority may on his discretion admit a belated appeal if he is satisfied that there is sufficient grounds to condone the delay. (3) No appeal shall be admitted unless it is duly stamped and is accompanied by the proceedings or order in original against which the appeal is filed. (4) The appellate authority may confirm, vary or cancel the proceedings or order appealed against. (5) No order affecting the interest of any other person, who is not a party in such appeal, shall be made without giving such person an opportunity of being heard. (6) Government may at any time ‘suo moto’ or otherwise, call for the records and revise, alter or cancel any decision made or any order passed by a subordinate authority under these rules: Provided that, no decision or order shall be so revised, altered or cancelled unless the parties affected by such decision or order is given and an opportunity of being heard.” Thus, the Rules prescribe a detailed procedure with respect to an appeal against an impugned order. It is under Sub Rule 4 that the appellate authority is confirming, varying or cancelling the proceedings or order appealed against. Here, Ext.P5 order has been issued on the basis of the above powers. 9. If the said order at Ext.P5 is not acceptable to the Government, the remedy is provided under Sub Rule (6), under which the Government can suo moto call for the records and revise, alter, or cancel any decision or order passed by a subordinate authority. Here, the order at Ext.P5 is issued as early as 01.12.2005. The respondents have no case that they have taken recourse to the remedy under Rule 18(6) of the Rules. 10. In this connection, the averment in the counter affidavit filed on behalf of the 4th respondent is relevant. In paragraph No.4 a counter affidavit dated 22.05.2013, it is pointed out that “The findings of the Land Revenue Commissioner vide order No.LR J3-14765/2005 dated 1.12.2005 are not acceptable on the following grounds.” The respondents cannot be expected to contend that an order issued by an Appellate Authority under the appellate powers vested upon him is not acceptable to them. The Apex Court in Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal [ (1960) 40 ITR 618 ], considered a question as regards the legality or otherwise of the refusal on the part of the authorities under the Income Tax Act to carry out positive directions issued by the Appellate Tribunal under the Act, holding that the directions issued by the Tribunal were incorrect. The findings by the Apex Court were as follows: “8. We think that the learned Judicial Commissioner was clearly in error in holding that no manifest injustice resulted from the order of the respondent conveyed in his letter dated March 24, 1955. By that order the respondent virtually refused to carry out the directions which a superior tribunal had given to him in exercise of its appellate powers in respect of an order of assessment made by him. Such refusal is in effect a denial of justice, and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of courts. Such refusal is in effect a denial of justice, and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of courts. If a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exercise of its appellate powers, the result will be chaos in the administration of justice and we have indeed found it very difficult to appreciate the process of reasoning by which the learned Judicial Commissioner while roundly condemning the respondent for refusing to carry out the directions of the superior tribunal, yet held that no manifest injustice resulted from such refusal. 9. It must be remembered that the order of the Tribunal dated April 22, 1954, was not under challenge before the Judicial Commissioner. That order had become final and binding on the parties, and the respondent could not question it in any way. As a matter of fact the Commissioner of Income Tax had made an application for a reference, which application was subsequently withdrawn. The Judicial Commissioner was not sitting in appeal over the Tribunal and we do not think that in the circumstances of this case it was open to him to say that the order of the Tribunal was wrong and, therefore, there was no injustice in disregarding that order. As we have said earlier, such a view is destructive of one of the basic principles of the administration of justice.” To the same effect is the judgment of the Apex Court in Union of India (UOI) and Others v. Kamlakshi Finance Corporation Ltd. [ 1991(55) ELT 433 (SC)], wherein the directions issued by the Collector (Appeals) with respect to an appeal filed under the Central Excise Act was not followed by lower authorities taking the view that the appellate order has not been “agreed to by the Department”. The Apex Court considering the above issue, found as follows: “6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. The Apex Court considering the above issue, found as follows: “6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers, in reaching in their conclusion by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities; The order of the Appellate Collector is binding on decisions of the appellate authorities; The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in the administration of tax laws.” In the case at hand also, the respondents are not following the directions issued by the 2nd respondent herein as the said findings “are not acceptable”. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in the administration of tax laws.” In the case at hand also, the respondents are not following the directions issued by the 2nd respondent herein as the said findings “are not acceptable”. The respondents cannot be heard to say that as order issued by an appellate authority acting under the provisions of the Rules is not binding upon them, since, the directions are not acceptable to them. As noticed above, in such cases, the remedy lies elsewhere. The Government could have taken the suo motu steps under Rule 18(6). But even though the orders of the 2nd respondent are dated 1.12.2005 till date no steps under Rule 18(6) is taken in the matter. Therefore, in the light of the above principles laid down by the Apex Court, the revenue recovery proceedings initiated against the petitioner are without any basis. 11. It is also to be noticed that the learned Government Pleader has placed much reliance on the objections raised by the office of the 4th respondent, as highlighted in the counter affidavits. However, the order at Ext. P5 has been issued by the 2nd respondent exercising the appellate powers conferred upon him by the Rules. The 4th respondent cannot be expected to say that the findings contained in the appellate order is erroneous. The Apex Court in M/s.Indian & Eastern Newspaper Society, New Delhi v. Commissioner of Income Tax, New Delhi [ (1979) 4 SCC 248 ], while considering the legality of re-assessments under the Income Tax Act, on the basis of the opinion of the audit wing of the department, held as under: “Whether it is the internal audit party of the Income Tax Department or an audit party of the Comptroller and Auditor- General, they perform essentially administrative or executive functions and cannot be attributed the powers of judicial supervision over the quasi-judicial acts of income tax authorities. The Income Tax Act does not contemplate such power in any internal audit organization of the Income Tax Department; it recognizes it in those authorities only which are specifically authorized to exercise adjudicatory functions.” In the light of the principles laid down as above by the Apex Court, much sanctity cannot be attributed to the opinion of the 4th respondent, in the case at hand. In such circumstances, I allow this writ petition quashing Exts.P10 and P11 issued by the 5th respondent herein. There will also be a direction to respondents 1 to 3 to consider and pass orders on Exts.P12 and P13 submitted by the petitioner, as expeditiously as possible, at any rate, within a period of six months, strictly in accordance with law.