2001 (6) TMI 791 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Deputy Commercial Tax Officer to attach property.
2. Competence of the authority to declare sales void.
3. Applicability of Section 17-A of the APGST Act.
4. Validity of attachment under Section 27 of the Revenue Recovery Act.
5. Interpretation of "any proceeding" in Section 17-A of the APGST Act.

Detailed Analysis:

1. Jurisdiction of the Deputy Commercial Tax Officer to Attach Property:
The writ petitions challenge the attachment proceedings initiated by the Deputy Commercial Tax Officer under Section 27 of the Andhra Pradesh Revenue Recovery Act, 1864, read with Section 17-C of the APGST Act. The petitioners argue that these provisions allow attachment only of property belonging to the defaulter-dealer, not third parties. The court, however, finds that the provisions of Section 17 of the Revenue Recovery Act empower the Recovery Officer to attach the property and that any third party claiming a right to the property must seek relief through a civil court.

2. Competence of the Authority to Declare Sales Void:
The petitioners contend that the Deputy Commercial Tax Officer lacks the jurisdiction to declare the sales void, asserting that such declarations can only be made by a competent civil court. The court disagrees, stating that if a statute empowers a statutory authority to declare a sale transaction void for defrauding public revenue, the authority can indeed make such a declaration, though it may be subject to the decree of a civil court unless explicitly ousted by statute.

3. Applicability of Section 17-A of the APGST Act:
The petitioners argue that Section 17-A of the APGST Act, which voids transfers made to defraud revenue, does not apply as no tax proceedings were pending at the time of the sale. The court clarifies that Section 17-A applies in two situations: during the pendency of any proceeding or after its completion. The court interprets "any proceeding" to include assessment proceedings, noting that show cause notices were issued before the sale, making Section 17-A applicable.

4. Validity of Attachment under Section 27 of the Revenue Recovery Act:
The court examines the attachment under Section 27 of the Revenue Recovery Act, which mandates public proclamation and publication in the District Gazette. The court finds that the attachment notices were issued following these procedures, thus validating the attachment.

5. Interpretation of "Any Proceeding" in Section 17-A of the APGST Act:
The court emphasizes that the term "any proceeding" in Section 17-A is broad and unqualified, encompassing assessment proceedings. The court rejects the petitioners' narrow interpretation that limits "any proceeding" to post-assessment recovery actions, emphasizing that such an interpretation would render part of the statute superfluous.

Conclusion:
The court dismisses the writ petitions, upholding the jurisdiction and actions of the Deputy Commercial Tax Officer. It affirms that the officer can attach property and declare sales void under the relevant statutory provisions, and that Section 17-A of the APGST Act applies to the case at hand. The court also underscores the necessity for third parties to seek relief through civil courts if they claim rights to attached property.