TaxTMI 
TaxTMI 
2008 (3) TMI 498
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....ember 1, 1984, wherefor requisite approval was granted by the Government of Kerala on or about April 27, 1985. The sales tax authorities were intimated thereabout by communications dated May 4, 1985 and May 30, 1985. The said letters read as under: "4th May, 1985 I am writing this letter to inform you that I have leased out the Distillery unit in Cheemeni, Kasargod District to Eagle Distilleries Pvt. Ltd., having their registered office at Bangalore, Karnataka, for a period of five years from 1st December, 1984. The specific reason we have not renewed the registration this year, is this. We have asked Eagle Distilleries to take a new registration in their name. I am enclosing herewith a copy of the lease deed for your reference. Kindly acknowledge receipt of the same." "30th May, 1985 Further to our registered acknowledgement due letter along with the copy of the lease deed which you have acknowledged on May 7, 1985, we wish to inform you that our distillery unit at Cheemeni known as 'Normandy Berweries & Distilleries" Cheemeni will not be in any way responsible for the tax due after the 1st December, 1984. Any tax dues after that date will have no claim over the assets ....
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....he returns and accounts as incorrect and incomplete and to finalise the assessment on the basis of the best judgment assessment as specified therein. The "lessee" did not respond thereto. Cause was shown by the appellant. In the assessment proceeding only the appellant represented. The assessing authority passed an order of assessment holding both the appellant as also "the lessee" jointly and severally liable for the sales tax dues both under the Act as also Central Sales Tax Act for the assessment years 1986-87 and 1987-88. Statutory appeals were preferred thereagainst and by a judgment and order dated January 30, 1995 the appellate authority allowed the said appeals in so far as the appellant was concerned and directed recovery of the dues only from "the lessee". The Revenue preferred second appeals before the Tribunal. The Tribunal by its order dated December 20, 2001 allowed the appeals of the Revenue. Revision applications filed thereagainst by the appellant before the High Court have been dismissed See [2006] 144 STC 588 (Ker). holding: "27. The question in such circumstances is as to whether the lessee can also be made liable. It is unnecessary for us to consider the same....
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....fraud had been committed by the appellant and "the lessee", the impugned judgment should not be interfered with. (ii) The appellant having allowed its alleged "lessee" to use the registration number as also the prescribed forms "C" and "D", which were supplied by the department to it on its asking, now it cannot turn around and contend that it was not liable to pay any tax. (iii) Since in the writ petition the subject-matter of challenge was not the order of assessment but the liability as a garnishee, the impugned judgment is unassailable. (iv) Assuming section 19C of the Act is not applicable, the preassessment notice as also the assessment proceedings having been conducted pursuant to the direction issued by the High Court in its judgment dated February 12, 1993, the correctness whereof having not been questioned, the impugned order cannot be found fault with. We may not, for the purpose of the present case, consider the assessment orders as also the appellate orders. The Tribunal upon analysing the materials placed before the assessing authority, inter alia, held: "Thus the conduct of the parties lead to the inference that the lessee acted as an agent of the lessor a....
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.... Thus, at any rate, the lessor and lessee are jointly and severally liable for the tax which is legitimately due to the Government. So, the order of assessment has to be restored." It was furthermore held: "26. Thus, since it has come out in evidence that the application for registration put in by the lessee was dismissed under the circumstances referred to above and the registration of the lessor continued in force and that the lessor has, without returning the delivery notes and the C forms issued in their favour to the department, thereby violated the mandatory provisions under the Rules and permitted the lessee to continue to do the business in the trade name of the lessor themselves, we find that, here, the assessing authority was perfectly justified in finding that the lessor and lessee were colluding with each other and were practicing fraud on the Government in order to evade payment of tax which is legitimately due to the Government." The Act was enacted to consolidate and amend the law relating to the levy of a general tax on the sale or purchase of goods in the State of Kerala. "Registered dealer" has been defined to mean a dealer registered under the Act. Admittedly,....
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....ticulars and at such intervals, as may be prescribed. Along with the return, under section 6 he is required to pay the amount of tax due in respect of the motor spirit sold by him in retail during the preceding month according to the return. In order therefore that the State may have a check on the person from whom the tax is due section 4(1) provides for registration of dealers who carry on the business in motor spirit. Without such registration it would be impossible for the State to know the persons who are selling motor spirit and from whom the tax is due. . ." See also Pramod Foods Pvt. Ltd. v. State of Kerala [1988] 69 STC 257 (Ker). Management of business may be handed over by the owner to another but the department must be made known thereabout. A fresh registration certificate must be applied for and granted. The business by the lessee continued under the old name. It was done at the behest of the appellant. It, therefore, cannot now turn around and contend that it was not liable to pay any tax. It may be true that section 19C of the Act having come into effect from August 29, 1989, could not be given any retrospective effect but then the Legislature was not presumed t....
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....e Act under which it can be said that the assessee is a person by whom income-tax is payable on the amount of Rs. 24,341 which came to her by way of remission on account of what had transpired in the lifetime of her husband. The Act does not contain any provision making a successor in business or the legal representative of an assessee to whom an allowance has already been granted, liable to tax under section 41(1) in respect of the amount remitted and received by the successor or the legal representative . . ." We have noticed hereinbefore that a finding of fact has been arrived at that for all intent and purport the appellant was the agent of "the lessee". Furthermore, a distinction must be borne in mind between the provisions of the Income-tax Act and Sales Tax Act. Sales tax is leviable on a sale. The manufacturer of the liquor is an assessee. It is a dealer within the meaning of the said Act. For the purpose of realisation of the sales tax, one who manages the business may not come to the front. Applying the doctrine of Crown debt the assets of the unit could be attached or sold therefor. Crown debt, as is well known, unless there is a statutory interdict, prevails over all ....