Karnataka High Court Rules District Collector "Did Not Have the Authority to Grant Installment Payments" for Sales Tax Dues Under Kerala General Sales Tax Act and Rules

In a recent judgment, the Honourable Mr. Justice Dinesh Kumar Singh of the Kerala High Court has clarified the jurisdictional roles of various authorities with respect to granting installment payments for Sales Tax dues. The court explicitly stated that the District Collector, the first respondent, "did not have the authority to grant installment payments for such tax dues under the prevailing Kerala General Sales Tax Act and Rules."

The writ petition was filed by S. Mangalan, a 72-year-old resident of Thiruvananthapuram, challenging the notices issued against him for the recovery of Sales Tax dues, along with interest and collection charges. The petitioner had initially approached the District Collector with an application to pay the outstanding tax amount in fifty installments, which led to the judicial scrutiny of the matter.

Justice Dinesh Kumar Singh observed, "The petitioner has an outstanding tax liability of Rs. 1,55,11,002/- as per the notice dated 11.08.2023; argues that the District Collector is not empowered to grant installments."

The court further clarified that it is the Sales Tax Officer, and not the District Collector, who has the authority to grant up to six installment payments for such tax dues, as per Rule 30(B) of the Kerala General Sales Tax Rules, 1963.

The petitioner has now been granted ten days to file an application for payment in six installments before the Sales Tax Officer. In the interim, the High Court has also ordered a temporary stay on the implementation of the impugned notices.

Legal experts consider this judgment as a significant clarification on the roles and limitations of different administrative bodies in tax recovery processes under the Kerala General Sales Tax Act and Rules.

 Date of Decision: 13 September 2023

S.MANGALAN    vs   THE DISTRICT COLLECTOR