IN THE HIGH COURT OF KERALA AT ERNAKULAM CRP.No. 1489 of 2003()
1. ANAKKAYAM JUMA-ATH PALLI AND MADRASA ... Petitioner
1. THE KERALA WAKF BOARD
For Petitioner :SRI.K.K.MOHAMED RAVUF For Respondent :SRI.M.M.SAIDU MUHAMMED,SC,WAKF BOARD The Hon'ble MR. Justice PIUS C.KURIAKOSE The Hon'ble MR. Justice P.S.GOPINATHAN Dated :07/10/2010
O R D E R
PIUS C. KURIAKOSE &
P. S. GOPINATHAN, JJ. C. R. ------------------------------------------------ C. R. P. Nos.1489, 1490 & 1491 of 2003 ------------------------------------------------ Dated this the 7th day of October, 2010 ORDER
As per Section 72 of the Wakf Act, 1995, the Mutawalli of every Wakf, the net annual income of which is not less than five thousand rupees, shall pay annually, out of the net annual income derived by the Wakf, such contributions, not exceeding seven per cent of such annual income, as may be prescribed, to the Wakf Board for the services rendered by the Board to the Wakf. The revision petitioner/Wakf, according to them, did not pay the contribution for the reason that their annual net income is less than Rs.5,000/-. Sub Section 8 of Section 72 authorises the Chief C. R. P. Nos.1489, 1490
& 1491 of 2003 -2- Executive Officer of the Wakf Board, whenever there is failure to pay the contribution as stipulated under Section 72 or to file annual return, to serve upon the Mutawalli a notice demanding payment thereof within 30 days from the date of service of such notice within a period of 5 years from the last date of the year to which such escaped assessment relates.
2. Alleging that the revision petitioner Wakf failed to file return and to remit the contribution from 1976 to 1996 a notice dated 20/09/1997 was served upon the revision petitioner calling upon to file return and remit due contribution. Despite the notice, the revision petitioner did not file the return. Neither remitted the contribution. Consequently, the Chief Executive Officer passed C. R. P. Nos.1489, 1490
& 1491 of 2003 -3- three assessment orders on 30/10/98, one for the period of 10 years from 1976-77 to 85-86, the second one for the following period of ten years from 1986-87 to 95-96 and the third one for two years - 1996-97 and 1997-98. As per the order dated 30/10/98 for the first decade, Rs.31,020/- was assessed and the revision petitioners were directed to remit the same. For the following decade also, the same amount was assessed and demanded. For the last 2 years Rs.8,143/- was demanded. Assailing the above three assessment orders, three appeal petitions were filed before the Wakf Board as Appeal Petition Nos.12/00, 13/00 and 14/00.
3. The contention advanced is that the net income of the Wakf is less than Rs.5,000/- and C. R. P. Nos.1489, 1490
& 1491 of 2003 -4- that the assessment beyond a period of five years is barred by limitation and hence, no demand can be made under Section 72(8) of the Wakf Act. The Wakf Board overruled the contentions and dismissed the appeal petitions.
4. Assailing the orders of the Wakf Board, three applications as O.P. Nos.1/01, 2/01 and 3/01 were preferred before the Wakf Tribunal, Kozhikode. The Wakf Tribunal also overruled the contention that assessment beyond a period of five years is barred by limitation. But, it was held that escaped assessment mentioned in Section 72 (8) pertains only to a case where a portion of the income is omitted from the assessment and not in a case where there is no assessment at all. According to the Tribunal, in the disputed cases, C. R. P. Nos.1489, 1490
& 1491 of 2003 -5- since there is no filing of return at all, there is no limitation in passing an assessment under Section 72(6) read with Section 72(8). It was further found that there was no data available on record to fix the net income. Therefore, the Wakf Tribunal remanded the matter for giving an opportunity to both parties to adduce evidence regarding the net income of the Wakf. Assailing the above orders these revision petitions were filed.
5. The question that arises for consideration in these revision petitions is:-
Whether the escaped assessment mentioned in Section 72(8) relates only when there is a partial escape of the assessment or whether it relates to total escape of assessment also. C. R. P. Nos.1489, 1490
& 1491 of 2003 -6-
6. For correct appraisal, a reading of Section 72 of the Wakf Act would be relevant. "Section 72:- Annual contribution payable to Board - (1) The mutawalli of every Wakf, the net annual income of which is not less than five thousand rupees, shall pay annually, out of the net annual income derived by the Wakf, such contributions, not exceeding seven per cent of such annual income, as may be prescribed, to the Board for the services rendered by such Board to the Wakf. (Explanations omitted as not relevant) (2) The Board may in the case of any mosque or orphanage or any particular Wakf reduce or remit such contribution for such time as it thinks fit.
(3) The mutawalli of a Wakf may realise the contributions payable by him under sub- section (1) from the various persons entitled to receive any pecuniary or other material benefit from the Wakf, but the sum realisable from any one of such persons shall not exceed such amount as shall bear to the total contribution payable, the same proportion, as the value of the benefits receivable by such person bears to the entire net annual income of the Wakf: Provided that if there is any income of the Wakf available in excess of the amount payable as dues under this Act, other than as the contribution under sub-section (1), and in excess of the amount payable under the Wakf deed, the contribution shall be paid out of such C. R. P. Nos.1489, 1490
& 1491 of 2003 -7- income.
(4) The contribution payable under sub- section (1) in respect of a Wakf shall, subject to the prior payment of any dues to the Government or any local authority or of any other statutory first charge on the Wakf property or the income thereof, be a first charge on the income of the Wakf and shall be recoverable, on a certificate issued by the Board after giving the mutawalli concerned an opportunity of being heard, as an arrear of land revenue.
(5) If a mutawalli realises the income of the Wakf and refuses to pay or does not pay such contribution, he shall also be personally liable for such contribution which may be realised from his person or property in the manner aforesaid.
(6) Where, after the commencement of this Act, the mutawalli of a Wakf fails to submit a return of the net annual income of the Wakf within the time specified therefor or submits a return which, in the opinion of the Chief Executive Officer is incorrect of false in any material particular, or which does not comply with the provisions of this Act or any rule or order made thereunder, the Chief Executive Officer may assess the net annual income of the Wakf to the best of his judgment or revise the net annual income as shown in the return submitted by the mutawalli and the net annual income as so assessed or revised shall be deemed to be the net annual income of the Wakf for the purposes of this section: C. R. P. Nos.1489, 1490
& 1491 of 2003 -8- Provided that no assessment of net annual income or revision of return submitted by mutawalli shall be made except after giving a notice to the mutawalli calling upon him to show cause, within the time specified in the notice, as to why such assessment or revision of the return shall not be made and every assessment or revision shall be made after considering the reply if any, given by the mutawalli.
(7) Any mutawalli who is aggrieved by the assessment or revision made by the Chief Executive Officer, under sub-section (6), may prefer an appeal to the Board within thirty days from the date of the receipt of the assessment or revision of return and the Board may, after giving the appellant a reasonable opportunity of being heard, confirm, reverse or modify the assessment or revision or the return and the decision of the Board thereon shall be final.
(8) If, for any reason, the contribution or any portion thereof leviable under this section has escaped assessment in any year, whether before or after the commencement of this Act, the Chief Executive Officer may, within five years from the last date of the year to which such escaped assessment relates, serve upon the mutawalli a notice assessing him with the contribution or portion thereof which had escaped assessment, and demanding payment thereof within thirty days from the date of service of such notice, and the provisions of this Act and the rules made thereunder, shall, as far as may be, apply as if the assessments were made under this Act, in the first instance." C. R. P. Nos.1489, 1490
& 1491 of 2003 -9-
7. Going by the above provision, especially sub clause 8, we find that the escaped assessment mentioned in Section 72(8) pertains to assessment escaped in part as well as full. We are unable to agree with the view adopted by the Tribunal that in case a portion of the income is escaped from assessment, there is limitation and in case the whole income is escaped from assessment, there is no limitation. It did not appear that the legislature so intended. On the other hand, the words "contribution or any portion thereof leviable under this section has escaped assessment in any year" occurring in sub clause 8 clearly expresses the intention of the legislature that the escaped assessment covers full escape as well as partial escape. The purpose of limitation is C. R. P. Nos.1489, 1490
& 1491 of 2003 -10- to avoid reopening of matters settled for long. In other way it is to avoid de-settlement of matters settled beyond a prescribed period. Here the legislature had fixed a time limit of five years in reopening the accounts settled irrespective of the quantum. Whether it is partial escape of income or full escape is immaterial. Therefore, we find that escaped assessment mentioned in Section 72(8) would include full escape as well as partial escape.
8. An identical dispute was the consideration of the Apex Court under the Sales Tax in Ghanshyamdas v. Regional Assistant Commissioner, Sales Tax (AIR 1964 SC 766). The Apex Court held that the expression "escaped assessment" in Section 11(a) includes that of a turnover which has not been assessed at all because of one C. R. P. Nos.1489, 1490
& 1491 of 2003 -11- reason or the other and no assessment proceedings were initiated and therefore, no assessment was made in respect thereof. We find that the ratio of the above decision is squarely applicable to the case on hand. Sri.A.A.Abul Hassan, the learned Standing Counsel for the Wakf Board fairly conceded that the law laid down by the Apex Court in the decision (supra) is squarely applicable to this case also and that the Executive Officer would get power to issue notice and make assessment only in respect of escaped assessment within a period of 5 years. It was further conceded by the learned counsel that applying the above principle, the notice and assessment in respect of the income beyond the period of 5 years from the date of assessment is C. R. P. Nos.1489, 1490
& 1491 of 2003 -12- barred by limitation. We find that for reasons stated above, the assessment order dated 30/10/98 is bad in respect of the income beyond 01/01/93. The question raised is answered accordingly.
9. In the result, CRP No.1489/03 is allowed and the assessment pertaining to the period from 1976-1977 to 1985-1986 is set aside. CRP 1490/03 is allowed in part. The assessment made in that case up to 31/12/92 is set aside. In respect of the assessment subsequent to 01/01/93, the Chief Executive Officer of the Board is entitled to assess and demand due contribution. But the assessment should be based on reliable materials. The finding of the Tribunal that the assessment made by the Board is without reliable materials C. R. P. Nos.1489, 1490
& 1491 of 2003 -13- and the order of remand for fresh assessment in respect of income subsequent to 01/01/93 is perfectly sustainable and requires no interference. The impugned order in CRP.1490/03 in respect of assessment subsequent to 01/01/93 is therefore, perfectly sustainable. CRP 1491/03 is devoid of merit and is accordingly dismissed. No costs. PIUS C. KURIAKOSE
P. S. GOPINATHAN