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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 18TH DAY OF NOVEMBER, 2013
BEFORE
THE HON'BLE MRS.JUSTICE B.V.NAGARATHNA
WRIT PETITION NOs.38139/2013 c/w 33745-747/2013 (T-IT)
W.P.NO.38139/2013
BETWEEN:
NIMS MANAGEMENT INSTITUTION PVT. LTD., REGISTERED OFFICE AT:No.123, 1ST MAIN ROAD, KENGERI SATELLITE TOWN, BANGALORE, REP. BY ITS DIRECTOR, SMT. SUKANYA HEGDE. ... PETITIONER
(BY SRI: GANAPATHI BHAT, ADV.)
AND:
1.THE TAX RECOVERY OFFICER, CENTRAL RANGE-1, 4TH FLOOR, CENTRAL REVENUES BUILDING, ANNEXE, QUEEN’S ROAD, BANGALORE-560 001.
2.THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, CENTRAL REVENUES BUILDING, QUEENS ROAD, BANGALORE.
3.THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), NO.621, HMT BHAVAN, 6TH FLOOR, BELLARY ROAD, GANGANAGAR. ... RESPONDENTS
(BY SRI: K.V.ARAVIND, ADV.)
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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO, DIRECT THE RESPONDENTS TO ISSUE CONFIRMATION OF SALE CERTIFICATE IN PURSUANCE OF SALE OF PUBLIC AUCTION CONDUCTED ON 18.3.2013 IN RESPECT OF THE PROPERTY BEARING SY.NO.142/4 MEASURING 5 ACRES 13 GUNTAS, SITUATED AT SHIVAPURA VILLAGE, KASABA HOBLI, DODDABALLAPURA TALUK BY THE RESPONDENTS WITH IMMEDIATE EFFECT.
W.P.NO.33745-747/2013
BETWEEN:
SRI.S.N.RAVIKUMAR, AGED ABOUT 54 YEARS, S/O SRI.A.S.NARAYANA RAO, R/A FLAT NO.401, STANBERRY COURT, NO.12, 60 FEET ROAD, SANJAYNAGAR, BANGALORE-560 094. ... PETITIONER
(BY SRI: S.PARTHASARATHI, ADV.)
AND:
THE TAX RECOVERY OFFICER, CENTRAL RANGE-1, 4TH FLOOR, CENTRAL REVENUES BUILDING, ANNEXE, QUEENS ROAD, BANGALORE-560 001. ... RESPONDENT
(BY SRI: K.V.ARAVIND, ADV.) *****
THESE WPs ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO, QUASH THE COMMUNICATION /LETTER DT.10.7.13, OF THE RESPONDENT FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09 VIDE ANN-M.
THESE PETITIONS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, COURT MADE THE FOLLOWING:-
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O R D E R
W.P.Nos.33745-47/2013 is filed by the assessee, assailing the communication dated 10/07/2013 issued by the first respondent – Tax Recovery Officer, Central Range – I, Bangalore and also the communication dated 16/07/2013, which are at Annexures ‘M’ and ‘P’ respectively. Similarly, communication dated 25/07/2013 is assailed which is at Annexure ‘T’. Direction is also sought against the respondents not to confirm the auction sale. Several other consequential directions are sought against the respondents.
W.P.No.38139/2013 is filed by the third party auction purchaser, which has purchased the property bearing No.142/4 measuring 5 Acres 13 Guntas of Shivapura village, Kasaba Hobli, Doddaballapura Taluk, pursuant to a public auction conducted on 18/03/2013, seeking confirmation of the said auction or alternatively, seeking a direction to the respondents to refund the entire bid amount of Rs.6,02,000/- and poundage deposited by the petitioner in respect of the public auction with interest at 17% from the date of deposit till realisation along with 5% damages and other miscellaneous expenses.
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As these matters pertain to the property of the petitioner, who is the assessee in the first of the writ petitions, they have been heard together and are disposed of by this common order.
The undisputed facts of the case are that the assessing authority had concluded assessment for the Assessment Years 2006-07, 2007-08 and 2008-09. Those assessments are the subject matter of challenge before the appellate authorities. In the interregnum, respondent – authority enforced recovery of the outstanding demands as arrears of tax. Certificate dated 10/01/2013 was issued and thereafter, the respondent proceeded to attach the properties of the assessee. While several applications were made by the assessee, seeking various reliefs and were under consideration by the Department, the land in question which was attached was brought to auction on the issuance of a sale proclamation, on 18/03/2013 at about 11.00 a.m. The conduct of the auction on the said date was assailed in W.P.Nos.15891-893/2013 before this Court and the writ petition was disposed of on 18/06/2013, permitting the assessee to prosecute its appeals before the CIT – Appeals and incase it was unsuccessful before the
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said appellate authority, to pay the certified demand made by the Revenue within ten days from the date of the receipt of the order passed by the CIT-Appeals. It was also made clear that in the event the Department conducted an auction for any other reason whatsoever, then the assessee was liable to make good the lesser amount received from the prospective auction purchaser and to file an affidavit to that effect. Subsequent to the disposal of W.P.Nos.15981-83/2013, there have been several communications between the Department and the assessee which are at Annexures “M”, “N” and “P” dated 10/07/2013. Those communications are assailed in the writ petition filed by the assessee. Although, the public auction was conducted on 18/03/2013 that was not confirmed by issuance of the sale certificate in favour of the petitioner in W.P.No.38139/2013 although it was the highest bidder. Therefore, the auction purchaser has filed W.P.No.38139/2013 seeking confirmation of the auction or alternatively, for refund of the amount as stated above.
I have heard learned counsel for the petitioners and the learned counsel for the respondent – Department and perused the material on record.
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Having regard to the directions issued by this Court in W.P.Nos.15891-93/2013, learned counsel for the assessee has stated that the certified demand has been deposited by the assessee but the Department is seeking payment of additional amounts which the assessee is not liable to pay. In response to this submission, learned counsel for the Department has stated that so long as there is no compliance with clause 60 of the II Schedule of the Income Tax Act, 1961, the Department would not be in a position to consider the claim of the assessee with regard to setting aside of the sale nor would it be in a position to consider the reliefs sought by the auction purchaser.
In this context, learned counsel for the assessee has stated that pursuant to the impugned communication at Annexure “P” dated 16/07/2013, a sum of Rs.8,37,380/- has already been deposited and that the assessee is also ready and willing to deposit the balance amount of Rs.30,10,000/- if some time is granted but as the appeals filed by the assessee are pending before the Income Tax Appellate Tribunal, liberty may be reserved to the assessee to seek refund of the said amount in
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accordance with law, in case the assessee is successful on merits in those appeals.
Learned counsel for the petitioner in W.P.No.38139/2013 at this stage, states that in case the respondent would set aside the auction sale, then in that event, the auction purchaser must be returned the bid amount along with interest and penalty and all other deposits which are made.
Learned counsel for the respondent – Department states that if the assessee makes deposit of the balance amount, then only the question of considering or setting aside the auction sale by the Department would arise and thereafter, return of amount to the auction purchaser could be considered. As the assessee is ready and willing to deposit the balance amount of Rs.30,10,000/- within a period of 15 days from today, it would not be necessary to go into merits of the communications impugned in the writ petition filed by the assessee. Therefore, while granting 15 days time from today to the assessee to pay the balance amount of Rs.30,10,000/-, liberty is also reserved to the auction purchaser to make its claim in terms of
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clause 64 of II Schedule to the Act. On such deposit being made by the assessee and on receipt of the claim from the auction purchaser, the respondent – Tax Recovery Officer shall consider the claim made by the auction purchaser within a period of three weeks from the date of balance deposit made by the assessee after setting aside the impugned sale.
In the result, the writ petitions are disposed of in the following terms:-
a) The assessee is directed to deposit the balance amount of Rs.30,10,000/-, within a period of 15 days from today.
b) The assessee is at liberty to seek refund of the amounts that it have deposited before the Department in these proceedings before the Income Tax Appellate Authority (ITAT), in accordance with law.
c) Within a period of 15 days from today, auction purchaser is at liberty to seek refund of the amounts as per clause 64 of the II Schedule to the Act.
d) The Tax Recovery Officer is directed to consider the claim made by the auction purchaser within a period of three weeks from the date of deposit of the balance
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amount by the assessee and to pass orders in accordance with law and to release the amounts due to the auction purchaser expeditiously, without necessiating the auction purchaser to once again approach this Court for the aforesaid purpose.
No costs.
Sd/- JUDGE.
*mvs