Smt. Alphonsa Cherian vs Additional Agricultural Income Tax and Sales Tax Officer and Others

K.A. Nayar, J.—The original petition is filed to quash exhibits P-3, P-4 and P-7. Exhibit P-3 is a notice dated May 29, 1985, issued by the first respondent to the petitioner stating that an amount of Rs. 13,299 will be recovered from her being the agricultural Income Tax arrears due from one Rajagopal, the third respondent. Exhibit P-4 is a notice of attachment of immovable property issued to the petitioner and exhibit P-7 is the notice issued by the second respondent dated March 27, 1987, proposing to sell 3.40 acres of cardamom land belonging to the petitioner.

The third respondent was an assessee on the file of the first respondent. The petitioner purchased from the third respondent 4.05 acres of land by exhibit P-1 sale deed dated July 2, 1979. Before purchasing the same, the petitioner obtained a certificate, exhibit P-2 dated December 17, 1979, certifying that Shri Rajagopal, S/o Chokkalinga Servai, Kuchanoor, is an assessee on the file of the Agricultural Income Tax and Sales tax Office and that there is no tax liability against him by way of agricultural Income Tax or sales tax for the period up to March 31, 1979. It would appear that the assessment for the year 1978-79 had not been completed when the certificate was issued by the first respondent. But long after, on February 13, 1984, the first respondent directed the third respondent to file returns for the years 1978-79 to 1982-83. On the same day, he directed the third respondent to produce the books of account to complete the assessment. There was no reply to that. On July 12, 1984, a pre-assessment notice was sent. That was received by the third respondent on July 17, 1984. But there was no reply to the same, Therefore, the assessment was completed u/s 18(4) of the Act on September 14, 1984. The assessment order was sent to the third respondent to his known address. It is seen from the postal endorsement that it was purported to be served on February 8, 1985, February 11, 1985 and February 12, 1985. But the assessee was not available. Thereafter, a copy of the same was sent to the petitioner on February 15, 1985. To that, the petitioner sent a reply dated March 1, 1985, received by the assessing authority on May 6, 1985. It is thereafter on May 29, 1985, that exhibit P-3 notice was sent to the petitioner stating that the petitioner is liable to pay the amount u/s 23 Of the Agricultural Income Tax Act and directing her to make the payment. Exhibit P-3 is followed by recovery proceedings evidenced by exhibits P-4 and P-7.

It is the petitioner''s contention that Section 23 of the Act is not strictly applicable to the case in question. Section 23 of the Act reads :

"23. Assessment in case of transfer of right in land.--Where a person in receipt of agricultural income from any land in the State is found to have transferred his interest in such land to another person, the transferor and the transferee shall each be assessed in respect of his actual share, if any, of such agricultural income :

Provided that when the transferor cannot be found, the assessment of such agricultural income of the previous year in which the transfer took place up to the date of the transfer and for the years preceding that year shall be made on the transferee in like manner and to the same amount as it would have been made on the transferor or when the tax in respect of the assessment made for any or all of such years assessed on the transferor cannot be recovered from him, it shall be payable by and recoverable from the transferee, and the transferee shall be entitled to recover from the transferor the amount of any tax so paid."

Under the proviso, in order to make the transferee liable, there should be a situation where the transferor cannot be found. It was so laid down in two decisions of this court, in Elizabeth Joseph v. Tahsildar [1972] KLT 270, this court held that a tax assessed on the transferor in respect of the accounting year in which the transfer took place, and also all arrears of tax due from him in respect of previous accounting years can be recovered from the transferee if the same cannot be recovered from the transferor. In JOSEPH MICHAEL AND BROTHERS LTD. Vs. STATE OF KERALA AND OTHERS., this court held that the liability to pay arises only because of the proviso to Section 23 and that proviso, in terms, must be satisfied before recovery can be had from the petitioner. That means that the Department must tell him that the recovery could not be had from the assessee himself and he should have an opportunity to point out to the Department that recovery could still be had from the assessee.

In this case, the third respondent is the transferor and the transferor has fairly admitted that the liability for the year 1978-79 being for the tax before the transfer is on him, that he could not discharge the liability only because the assessment order has not been served on him and that even though the first respondent served the order by affixture and by registered post, it has not reached him at all. The present address of the third respondent is given in exhibit P-6. The contention of the third respondent before me is that if proper assessment has been made on him, there would not be any liability on him for the year. In the circumstances of the case, he agrees that if there is any liability, it will be discharged by him But he prays that an opportunity may be given to him to contest the validity of assessment for the year 1978-79. The original of the order for the year 1978-79 was not available on the file of the Government Pleader.

I, therefore, direct the first respondent to send by registered post to the third respondent a copy of the order for the year 1978-79 immediately. The third respondent, if so advised, will file a representation before the Deputy Commissioner u/s 34 of the Act or other applicable provision of the Act. If the third respondent files a representation within one month of the receipt of a copy of the judgment, I am sure the same will be entertained by the Deputy Commissioner and appropriate orders passed in revision after hearing the third respondent. In the circumstances of the case, I quash exhibits P-3, P-4 and P-7 and as the third respondent has admitted his liability in this case for the year 1978-79, I direct that no further steps be taken against the petitioner to recover the agricultural Income Tax for the year 1978-79 in respect of the property covered by exhibit P-1 sale deed in her favour.

The original petition is disposed of as above. No costs.