ABOOBACKER Vs. STO

JUDGEMENT

(1.) SENIOR Government Pleader, Mr. N. N. Divakaran Pillai, sought to sustain the recovery proceedings initiated and pursued. A detailed counter affidavit, dated 18th July 1983 has been filed. The main contention of the petitioner is, that there should be a fresh notice of demand after the decision in the appeal or revision, either modifying or setting aside the original assessment order. According to counsel, the notice of demand issued originally will fade the moment the assessment order is set aside or modified. In this case, the assessment orders have been modified by the revisional orders, by Exts. P-l to P-4. So, a fresh notice of demand should be issued before further recovery proceedings are pursued. Reliance is placed on the decision reported in Income Tax Officer v. Seghu Buchiah Setty 52 ITR 538. It is true, that ordinarily if an order of assessment is set aside or modified in appeal or in revision, the notice of demand issued in pursuance to the original assessment order will cease to have effect. A fresh notice of demand on the basis of the appellate or revisional order will be necessary. But, the above principle will not apply where there are statutory provisions to the contrary. That appears to be the case, here because of Kerala Act 23 of 1967. In view of the provisions of the Kerala Taxation Laws (Continuation and Validation of recovery Proceedings) Act, 1967 (Act 23 of 1967), even in cases where the original order of assessment is set aside or modified, a fresh notice of demand need not be issued. S. 3 (1) (b) (i), (ii), and (iii) of Act 23 of 1967 may be usefully quoted: " (3 ). Continuation and validation of certain proceeding: (1) Where any notice of demand in respect of any government dues is served upon an assessee by a taxing authority under any scheduled Act, and any appeal or other proceeding is filed or taken in respect of such Government dues, then,- (a) * * * (b) Where such Government dues are reduced in Such appeal or proceeding,- (i) it shall not to be necessary for the taxing authority to serve upon the assessee a fresh notice of demand; (ii) the taxing authority shall give intimation of the fact of such reduction to the assessee, and where a certificate has been issued or an application or requisition has been made to any officer or authority for the recovery of such Government dues, also to such officer or authority; (iii) any proceedings initiated on the basis of the notice or notice of demand served upon the assessee before the disposal of such appeal or proceeding may be continued in relation to the amount so reduced from the stage at which such proceeding stood immediately before such disposal; * * *

(2.) A bare perusal of the above statutory provision makes the position clear. It shall not be necessary for the taxing authority to serve upon the assessee a fresh notice of demand after the decision rendered in appeal or in revision, whereby the assessment order is modified or set aside and the amount due is reduced. But under S. 3 (1) (b) (ii) it is mandatory that the taxing authority shall give intimation of the fact of such reduction to the assessee, and in cases where a certificate has been issued to the revenue recovery authority, also to such authority. Admittedly, in this case though in paragraphs 4 and 5 of the counter affidavit it is stated that after the dismissal of the revisions the petitioner was asked to remit the amount, there is no material to substantiate the above submission. Government Pleader, Mr. Divakaran Pillai, fairly conceded that there is nothing in the files to show that after the modification effected by Exts. P-1 to P-4, the taxing authority gave intimation of the reduced amount to the assessee. In so far as, the 1st respondent has failed to comply with S. 3 (1) (b) (ii) of Act 23 of 1967, it was incompetent for the respondents to pursue by way of sale of the properties, on the basis of attachment effected on 31st January 1981. After the said attachment, orders in revisions were passed on 18th May 1981 and 16th July 1981. Before the orders were passed in revisions, the amount due was Rs. 21,093. 45. It was for that amount, the attachment was made on 31st January 1981. After the revisions there has been some modification. That reduced amount was not intimated to the petitioner assessee. Failure to do so is fatal. There is a failure to comply with S. 3 (1) (b) (ii) of Act 23 of 1967. After the revisions, the recovery proceedings can be continued only for the amounts remaining due and not paid as per the revisional orders. On that short ground, ext. P-6 notice of sale dated 18th March 1982 should be annulled. I hereby do so.