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M/S.AYSHA ICE, RUBAN COMPLEX versus THE COMMISSIONER OF INCOME TAX

High Court of Kerala

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M/S.AYSHA ICE, RUBAN COMPLEX v. THE COMMISSIONER OF INCOME TAX - WP(C) No. 394 of 2007(V) [2007] RD-KL 737 (10 January 2007)

IN THE HIGH COURT OF KERALA AT ERNAKULAM

WP(C) No. 394 of 2007(V)

1. M/S.AYSHA ICE, RUBAN COMPLEX,
... Petitioner

2. M/S.RUBAN EXPORTS,

Vs

1. THE COMMISSIONER OF INCOME TAX,
... Respondent

2. THE TAX RECOVERY OFFICER,

3. THE EXECUTIVE ENGINEER (VALUATION),

For Petitioner :SRI.ALIAS M.CHERIAN

For Respondent :SC,KARNATAKA BANK

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR

Dated :10/01/2007

O R D E R

C.N. RAMACHANDRAN NAIR, J.

W.P. (C) NO. 394 OF 2007

Dated this the 10th day of January, 2007



J U D G M E N T

The prayer in this writ petition is for a direction to the 2nd respondent to permit the petitioners to sell an item of property attached by the 2nd respondent for recovery of arrears of tax in respect of which there is a prior charge in favour of M/s. Karnataka Bank. The documents produced by the petitioners mainly those filed in Debt Recovery Tribunal show that there is first charge for the Bank. Learned Standing Counsel appearing for the Income-Tax Department stated that in spite of query from the Income-Tax Department, Bank has not confirmed the same. The property charged to the Bank is above the value required to meet the bank- liability. Therefore, petitioners' claim that if they are allowed to sell the property, they can deposit the balance amount after discharging the bank- liability to the Income-Tax Department. Learned Standing Counsel appearing for the Income-Department submitted that liability is about Rs.1.75 crores and therefore, the property cannot be allowed to be sold below market price. Moreover, if Bank does not have first charge, the attachment by the I.T. Department will stand. The Bank has granted time to the petitioners till today to settle the liability under one time settlement scheme. Learned counsel for the petitioners submitted that without sale of property they cannot settle the liability under one time settlement scheme. WPC NO.394/07 Page numbers If Bank has first charge over the property, it will be open to the 2nd respondent to settle the bank-liability under one time settlement scheme offered by the Bank and take over the property and sell the same for recovery of arrears of tax, if he thinks that better recovery will be made by sale of property by the 2nd respondent . In the above circumstances, the writ petition is disposed of directing the Karnataka Bank to extend the time till 31st March 2007 for either the petitioners or the 2nd respondent to settle the liability, if the Bank has first charge over the property, which is the matter to be decided by the 2nd respondent after verifying the documents to be furnished by the Bank and the petitioners. I make it clear that the Bank can charge future interest on the one time settlement amount from tomorrow onwards till date of payment. If the liability is not settled by 31st March, 2007, either by the petitioners or by the 2nd respondent, then the Debt Recovery Tribunal will consider the rival claims of the petitioners and the 2nd respondent with regard to the charge and if Bank has first charge the Debt Recovery Tribunal will order sale of the property through the recovery officer and if any balance is left, it is for the 2nd respondent to make a claim before the recovery officer attached to the Debt Recovery Tribunal. If Bank does not have first charge, then of course it is for the 2nd respondent to pursue sale of the property to recover arrears of tax and if balance is left, the Bank can claim it. The 2nd respondent will take a decision about the priority WPC NO.394/07 Page numbers between the Bank and the I.T. Department within three weeks from the date of production of a copy of this judgment by the petitioners along with the copy of the documents. Petitioners will produce a copy of the judgment before the recovery officer and co-operate with the enquiry. If issue is to be decided by the C.I.T., It is for the 2nd respondent to refer the matter, which is pending before the 2nd respondent, to the Commissioner. In that event the directions issued above to the 2nd respondent will be followed by the 1st respondent. C.N. RAMACHANDRAN NAIR,

JUDGE

vps WPC NO.394/07 Page numbers

KURIAN JOSEPH, JUDGE

OP NO.

JUDGMENT

21st DECEMBER, 2006


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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