TaxTMI 
TaxTMI 
2024 (6) TMI 379
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....) by way of e-payment directly to the 1st respondent. The receipts are on record as Ext. P1. In respect of the penalty order issued by the 1st respondent, the petitioner filed a statutory appeal before the First Appellate Authority. As a condition for stay, the petitioner remitted a sum of Rs. 36,79,791/-, which was paid by way of demand draft to the 2nd respondent, as revenue recovery proceedings had been initiated to recover the amount of penalty also. The petitioner has approached this Court being aggrieved by the fact that collection charges on the sum of Rs. 1,22,65,972/- (an amount of Rs. 9,19,948/-) and collection charges on the amount of Rs. 36,79,791/- (an amount of Rs. 2,75,984/-) have been imposed on the petitioner. 2. The learned counsel appearing for the petitioner submits that the demand for collection charges in the facts and circumstances of the case is absolutely unsustainable, as no recovery proceedings were initiated except the issuance of notice demanding the payment, and in such circumstances, going by the law laid down by a Division Bench of this Court in Usha Mary v. Kerala Financial Corporation and Others; 2009 (4) KHC 254, no amount could have been collect....
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....lic interest, that the provisions of this Act shall be applicable to the recovery of amounts due from any person or class of persons to any specified institution or any class or classes of institutions, and thereupon all the provisions of the Act shall be applicable to such recovery. Provided that such specified institution or class or classes of institutions or autonomous bodies, as the case may be, shall be liable to pay collection charges for the recovery of the amounts, at such rate and in such manner as may be prescribed by the Government". This Court, interpreting the provisions of the above proviso to Section 71 read with Rule 5 of the Kerala Revenue Recovery Rules, came to the conclusion that the State was authorized to collect collection charges in respect of amounts recovered on behalf of institutions notified under Section 71 of the Act and also justified the collection of service charges at 1% in respect of the amounts paid directly by defaulters to the institutions notified under Section 71 of the Act. However, in paragraph No. 3 of the aforesaid judgment (Usha Mary (Supra)), this Court held as follows: 3. In order to appreciate the rival contentions, it is necessa....
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....s: 1. The attachment and sale of defaulter's movable property. 2. Immovable property or by appointing an agent for managing defaulter's immovable property of. 3. By arrest and detention of the defaulters. Chapters 2 and 3 deal with the procedure for attachment and sale of the property of the defaulter. Elaborate procedure has been prescribed under those two chapters. A proviso has been introduced under Section 71 by Act 31 of 2007 effective from 27/02/1980, making the institutions or autonomous bodies liable to pay the collection charges for the recovery of the amounts as prescribed by the Government. Section 76 provides that persons employed in serving notices or other process under the Act shall be entitled to batta as fixed by the Government. Section 77 provides that the interest and cost of process incurred in the process of recovery shall be recoverable from the defaulter and the surety. Under Section 86, the Government is bestowed with power to make rules to carry out all or any of the purposes of this Act. The Kerala Revenue Recovery Rules, 1968 were thus framed under the authority of Section 86. Rule 4 provides for batta and other charges. A table i....
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....rther steps towards attachment or sale are taken. Therefore, it is made clear that in the cases before us, our consideration is in respect of cases where in the process of recovery some steps other than mere notice under Section 7 or 34 have been taken. Thereafter, considering the provisions of Rule 5 of the Kerala Revenue Recovery Rules this Court held as follows: 4. There are two main issues to be considered on the questions mooted before us. The first main question is on the vires of Rule. 5. It is a settled position that the rule making authority being a delegate under the statute, such delegate cannot travel beyond the scope of the specific authority conferred on it. In other words, unless the Government is bestowed with power under the Act to make rules to realize collection charges or service charges, it cannot levy such charges by making provision under the rules, being a subordinate legislation. At the outset, we may deal with one issue regarding the two different expressions 'collection charges' and 'service charges'. Going by the scheme of the Act at the first blush it would appear that the cost of process given in detail under the table below. Rule 4, alo....
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....ether the provision is unreasonable and discriminatory. When the defaulters remit the dues directly to the institutions on exhausting all the steps taken by the revenue recovery authorities, all that the institutions have to bear is only 1% of the amount collected from the defaulters. If that be so, the levy of 5% is certainly unreasonable when the amount is collected in the process of recovery by the revenue recovery authorities. After all such proceedings are initiated only in situations of distress. As observed by learned Single Judge of this Court in Baskaran v. Sub Registrar, 2005 (3) KLT 150. "Making the poor, poorer is not what is intended by the Revenue Recovery Act and the Rules thereunder". Even otherwise, cost of involvement of the Government machinery cannot depend on the amounts collected in the process of coercive steps taken under the Revenue Recovery Act. Whether it is ten thousand rupees or ten crores of rupees, the process is the same. Therefore the levy of collection charges for utilizing the Government machinery, apart from the interest and cost as permitted under Rule 4, proportionate to the amount collected is nothing but an extortion and thus unreasonable ....