Madras High Court
K.Parimalam vs The Assistant Commissioner (St) on 2 August, 2021
WA.No.1857 of 2021
In the High Court of Judicature at Madras
Dated : 02.8.2021
Coram
The Honourable Mr.Justice T.S.SIVAGNANAM
and
The Honourable Mr.Justice SATHI KUMAR SUKUMARA KURUP
Writ Appeal No.1857 of 2021 & CMP.No.11800 of 2021
K.Parimalam ...Appellant
Vs
The Assistant Commissioner (ST),
Podanur Assessment Circle,
Coimbatore-18. ...Respondent
APPEAL under Clause 15 of the Letters Patent against the order
dated 07.4.2021 made in W.P.No.24760 of 2018.
For Appellant: Mr.N.Inbarajan
For Respondent: Mr.M.Venkateswaran, GA
Judgment was delivered by T.S.SIVAGNANAM,J
We have elaborately heard Mr.N.Inbarajan, learned counsel for
the appellant and Mr.M.Venkateswaran, learned Government Advocate
accepting notice for the respondent.
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WA.No.1857 of 2021
2. This appeal, filed by the writ petitioner, is directed against the
order dated 07.4.2021 in W.P.No.24760 of 2018.
3. The appellant – Mrs.K.Parimalam, W/O late V.Kadirvel, who
was the proprietor of M/s.Sri Angalamman Traders and who was
registered as a dealer under the provisions of the Tamil Nadu General
Sales Tax Act, 1959 (for short, the TNGST Act, 1959) on the file of the
respondent, filed the said writ petition challenging the notice of
recovery issued by the respondent dated 31.5.2002 under the
provisions of the Tamil Nadu Revenue Recovery Act, 1864 read with
Section 29 of the TNGST Act, 1959 and to direct the respondent to
raise the encumbrance created by way of intimation dated 12.12.2007.
4. The learned Single Judge, by the impugned order, dismissed
the said writ petition and aggrieved by the same, the appellant is
before us by way of this appeal.
5. The legal issue, which is canvassed before us in this appeal is
as to whether the learned Single Judge was right in not taking note of
the fact that Section 24(2) of the TNGST Act, 1959 provides the
charge and priority over the other claims against the property of a
registered dealer only if any tax or penalty is to be recovered, that
admittedly, the appellant herein – wife of the registered dealer, is not a
defaulter and that therefore, the respondent has no jurisdiction to
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WA.No.1857 of 2021
proceed against the appellant merely on the ground that the appellant
executed a security bond dated 02.9.1992. It is further submitted that
in the counter, there was a specific admission that the security bond in
Form XIXB was filed towards security for registration purpose only
under the provisions of the TNGST Act, 1959, that the appellant being
a surety, the property, which is an individual property, cannot be
proceeded against and that deprivation of property is a serious issue
and though it may not be a Fundamental Right, it is a human right and
therefore, the respondent would not be justified in proceeding against
the appellant's individual property.
6. The learned counsel for the appellant has drawn our attention
to the copy of the security bond dated 02.9.1992 and submits that the
bond clearly states that the appellant is only a surety and therefore,
she cannot be proceeded with.
7. Admittedly, at the time when the appellant's husband applied
for registration under the provisions of the TNGST Act, 1959, he was
required to furnish security for registration. The appellant voluntarily
offered the property in S.F.No.52/2A in site Nos.15 and 16 near SIHS
Colony, Singanallur, Coimbatore measuring an extent of 10 cents and
382 sq.ft as a security and assured the Government of Tamil Nadu that
for any amount due and payable by the registered dealer towards tax
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WA.No.1857 of 2021
or penalty, they are first entitled to proceed against the property of the
appellant, which had been more fully described in the schedule to the
security bond.
8. The argument of the appellant is that she has been described
as a surety.
9. In fact, the description of the appellant as a surety is on
account of the appellant having executed the surety bond.
10. What we are required to look into is the statutory form,
which has been stipulated under the provisions of the Tamil Nadu
General Sales Tax Rules and more particularly in terms of Rule 24(15-
A) of the said Rules. The said Rule enumerates various forms of
security, which the registered dealer is required to furnish at the time
when he or she seeks registration. The first among them is immovable
property. We may not be required to go into the other forms of
security since the appellant furnished an immovable property as a
security.
11. Explanation I to Rule 24(15-A) of the said Rules would be
relevant for the purpose of this case. It states that where the security
is furnished in the form of immovable property, the person furnishing it
may, in any town, to which Sub-Section (f) of Section 58 of the
Transfer of Property Act, 1882 is applicable, mortgage such property to
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WA.No.1857 of 2021
the Government by deposit of title deeds, that in other cases, the
security should be by means of registered mortgage of the immovable
property and that the security bond should be in Form XIX-B and
should be filed in duplicate, the original of which should bear
appropriate adhesive non judicial stamps or court fee stamps.
12. The statutory form as stipulated in Form XIX-B states that
the applicant, who is the husband of the appellant herein filed an
application for registration before the respondent under the TNGST
Act, 1959 and the Registering Authority directed the appellant's
husband to furnish security as required under Section 21 of the TNGST
Act, 1959. Therefore, the appellant mortgages and creates a charge
over the property mentioned in the schedule to the bond to the
Government of Tamil Nadu under Section 21 of the TNGST Act, 1959
and covenants that if the security amount due under Section 21 of the
TNGST Act, 1959 is not required, the bond shall be void and of no
effect, otherwise, it should remain in full force and effect. The
statutory form further stipulates the amount of stamp that should be
affixed.
13. Admittedly, there is no necessity for registration of a security
bond as the appellant is irrevocably bound herself to the dues payable
by the firm at the time when the registration was applied by the
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WA.No.1857 of 2021
husband of the appellant. Therefore, it will be too late in the day for
the appellant to state that the property cannot be proceeded against,
that it is her individual property and that the provisions of the TNGST
Act, 1959 do not specifically provide for recovery of arrears of sales
tax from a person, who is not a dealer/defaulter. The terms and
conditions of the bond read along with Explanation I to Rule 24(15-A)
are lucid and will clearly state that the respondent had enough
jurisdiction to proceed in terms of the security bond for recovery of tax
arrears payable by the said firm.
14. For all the above reasons, we find no grounds to interfere
with the order passed by the learned Single Judge.
15. Accordingly, the above writ appeal is dismissed. No costs.
Consequently, the connected CMP is also dismissed.
02.8.2021
To
The Assistant Commissioner (ST), Podanur Assessment Circle,
Coimbatore-18.
RS
https://www.mhc.tn.gov.in/judis/
WA.No.1857 of 2021
T.S.SIVAGNANAM,J
AND
SATHI KUMAR SUKUMARA KURUP,J
RS
WA.No.1857 of 2021 &
CMP.No.11800 of 2021
02.8.2021
https://www.mhc.tn.gov.in/judis/
