COTTANAD PLANTATIONS Vs. EXECUTIVE OFFICER

JUDGEMENT

(1.) A question of some importance in taxation law arises for consideration in these Original Petitions. The question is this. An assessment made in accordance with law became final. Subsequently, in a similar case it was established by a judicial decision that the assessment was unlawful. Can a demand be made for the tax assessed and will this court interfere with the demand in a proceedings under Art.226 of the Constitution, in view of Art.265 of the Constitution of India which says that 'no tax shall be levied or collected except by authority of law.'

(2.) The petitioners in these Original Petitions were assessed to the land cess by the 2nd Respondent Panchayat under S.66A of the Kerala Panchayats Act, 1960, and the Kerala Panchayats (Levy and Collection of Land Cess) Rules, 1971. The assessments became final. But, later this Court in Cochin Malabar Estates and others v. Executive Officer, Varantharappilly Panchayat ( 1975 KLT 102 ) held that similar demands made under S.66A of the Kerala Panchayats Act 1960, are unsustainable as the same were made without complying with the procedural safeguards in respect of the assessment proceedings. Thereafter, the 1st Respondent, Executive Officer of the Panchayat, issued the demand notices marked as Ext. P1 in both the Original Petitions to the petitioners calling upon them to pay the land cess in respect of the years 1973-74 to 1975-76. Thereupon the petitioners submitted objections to the demand notices produced as Ext R1 along with the counter affidavits filed by the 1st Respondent in both the Original Petitions. Apprehending further steps for the collection of the land cess the petitioners approached this court with these Original Petitions for quashing Ext. P1 demand notices issued.

(3.) Sri. K. Prabhakaran, learned counsel for the petitioners contends that in view of the decision in Cochin Malabar Estates and Others v. Executive Officer, Varantharappilly Panchayat (1975 KLT 102) the land cess assessed upon the petitioners became unlawful and hence the same cannot be collected in view of Art.265 of the Constitution, of India. In support of this contention, learned counsel refers to Rayalseema Construction v. Deputy Commercial Tax Officer (10 STC 345). In the above case collection of Sales Tax on 'works contracts' assessed on the petitioners there was questioned by them after the Madras High Court held in Cannon Dunkerly and Company, (Madras) Limited v. State of Madras ((1954) 5 STC 216) that 'works contracts' did not involve any element of sale of materials and that therefore the levy of Sales Tax in respect of those materials was unlawful. A writ of mandamus was issued directing the officers to forebear from collecting the tax from the petitioners. In the above case the High Court of Madras held: