STATE OF KERALA Vs. CANARA BANK

JUDGEMENT

(1.) Writ Appeal No. 1382 of 1999 arises out of the judgment in O.P.No 6072 of 1998 which was disposed of along with O.P.No 3823 of 1992 holding that Sales tax Department can proceed with the sale of the movables under attachments on condition that from out of the sale proceeds the amount due to the Bank would be paid to them and balance amount could be adjusted towards the tax due to the department by the fourth respondent. It is also stated in the judgment that the issue involved therein is covered by the judgment in O.P.No 2046 of 1985. State of Kerala and Assistant Commissioner of Sales tax (Assessment) are aggrieved by the said judgment and have approached this court with this writ appeal.

(2.) Fourth respondent in the writ petition had availed of loan facilities from Canara Bank for purchasing machinery and for running of the industry. In order to avail of the loan he had deposited title deeds relating to 3.24 acres situated in Aroor village in survey numbers 407/15, 407/13-2, 407/11-2, 407/12, 407/16, 407/17 and 430/1/24. Deposit was made on 15.4.1984. Title deeds were deposited with intend to create an equitable mortgage of the said property together with all structures and machinery standing on it. Third respondent in the writ petition, Tahsildar, initiated revenue recovery of an amount of Rs 1,76,94,849/- towards the arrears of sales tax for the years 1975-76, 1976-77, 1979-80, 1986-87, 1988-89 and 1990-91. When the recovery proceedings since were in progress Tahsildar received a communication from the Bank not to resort to revenue recovery proceedings since suit O.S.No 39 of 1989 is pending before the Sub Court, Cherthala and the Tahsildar replied stating that the writ petitioner is liable to pay sales tax from 1975-96 onwards. Canara Bank in the meantime approached this court by filing O.P.No 6072 of 1998 seeking writ of certiorari to quash Ext.P2 communication received from the Sales tax Department and also for an order restraining the sales tax authorities from attaching and selling the properties of the writ petitioner which were mortgaged to the Bank.

(3.) O.P.No 12644 of 1994 is the writ petition filed by State Bank of India seeking a direction to the sales tax department and other revenue authorities not to proceed against 1/8th share of the fourth respondent in 81.757 cents in survey No 2407/13 of Mattancherry village and also for other consequential reliefs. It is pointed out that the fourth respondent had availed of certain credit facilities for which he had deposited the title deeds of the property and the buildings thereon. Since amount was not repaid Bank filed O.S.No 106 of 1998 before the Sub Court, Cochin for realization of Rs. 20,90,468.86 together with interest which was decreed on 30.6.1998. Aggrieved by the rate of interest awarded, Bank filed A.S.No 348 of 1989. Contention was raised that the revenue authorities have no legal right to proceed against the petitioner. Further it is stated that since the suit was decreed on 30.6.1988 and that Section 26 B was introduced only in April 1999 the said provision has no retrospective effect.