TaxTMI 
TaxTMI 
TaxTMI 
All the State Tax Officers must very clearly understand that they have been given certain extra ordinary powers which are exceptional and those powers must be exercised only in rarest of the rare circumstances and that too after due care and verification of their powers. Huge powers have been vested with tax officials for collecting genuine taxes from fraudulent persons who have an intention to evade tax and a honest taxpayer deserves some respect and coercive measure are not meant for genuine taxpayer.
Here, it is not the case of respect but a taxpayer has been harassed by one state tax officer attached to Nagercoil Rural Assessment Circle, Nagercoil, Kanyakumari District, Tamil Nadu. This officer has exceeded his powers and simply sent a letter to the sub registrar, Kottaram Sub Registrar Office, Kanyakumari District not to register a document for which the state tax officer was not empowered to do so.
I understand from the order dated 16/02/2026 of the Madras High Court (Madurai Bench) in the matter of M/s. Lambogreen Agro Private Limited Vs State Tax Officer and other in wp (MD) 32789 and 7105 of 2025 that the State Tax officer has not understood as to what is within his powers and what things he should not do as that was not within his powers. Let us read the full story to understand as to whether this kind of atrocities should continue any more.
One Mr.Krishnan Pillai, Director of a Company settled a particular property in favor of his daughter during 2018. The daughter sold this property to another person on 20/02/2024 itself, on which date there was no attachment. Under the above circumstances, as on 21/01/2025 the State Tax Officer has issued Prohibitory order against the said property to the sub registrar. The buyer who acquired this property on 20/02/2024 sold this to another person on 25/02/2025. The sub registrar refused to register this document quoting the prohibitory order dated 21/01/2025 issued by the state tax officer.
The following table depicts the picture clearly.
No | Date | Event |
1 | Year 2018 | Settled in favor of Daughter |
2 | 20/02/2024 | Daughter sold property |
3 | 21/01/2025 | Prohibitory order issued |
4 | 25/02/2025 | Property was sold to petitioner. |
For the property which was sold on 25/02/2025 which was acquired by the seller who has got clear titles on 20/02/2024 itself and who is in no way connected with M/s. Cape Engineering Private Limited, the prohibitory order dated 21/01/2025 pertaining to VAT case of M/s. Cape Engineering Private Limited came as a hurdle.
The case was decided in favor of the petitioner and the operative portion reads as below:
9. In view of the above, the impugned communication in Na.Ka.No.A3/1237/2015 dated 21.01.2025, passed by the State Tax Officer, Nagercoil Rural Assessment Circle, Nagercoil, Kanyakumari District, insofar as it relates to the subject property, is set aside. The impugned check slip issued by the Sub Registrar, Kottaram Sub Registrar Office, Kanyakumari District dated 25.02.2025 is quashed. The petitioner is directed to re-present the document, if not already done. The Sub Registrar is directed to register the sale deed dated 25.02.2025, if it is otherwise in order, without insisting upon a No Objection Certificate from the State Tax Officer.
10. Accordingly, the writ petitions are allowed. No costs.
Though the story ends here, I sincerely wish that this kind of non-acceptable order by the State Tax Officer should stop at one stage. This is possible only when the erring official is taught the lessons as to what are within his powers and which are not. The law is bound to be binding on both taxpayer as well as tax administrators and both are expected to act within their rights and privileges and should not cross the border.
In my view, the story goes like A settled property in favour of B, B sold to C, and as on date of acquisition of the property by C, there were no issues and when C tries to sell the property to D, the registration is denied for non-payment of tax by A for which neither C nor D are responsible, huge burden was put on C who approached B to resolve and B in turn requested A to resolve for none of the faults of A, B, C or D.
All A, B, C as well as D should be compensated at least nominally for their sufferings which happened due to improper exercise of power by the State Tax officer, Nagercoil Rural Assessment Circle. The Controlling Officers of the concerned STO may kindly take appropriate departmental actions to avoid the repetition of such occurrences in the future.