2010 (11) TMI 883 - AT - VAT and Sales Tax

Summary

Issues:
- Sealing of suite by Certificate Officer for tax recovery
- Petitioner's claim of exclusive ownership of suite
- Liability of petitioner's father as director of defaulting company
- Validity of sealing and unsealing order

Sealing of Suite by Certificate Officer for Tax Recovery:
The petitioner filed a writ application under the West Bengal Taxation Tribunal Act, 1987 to unseal suite No. 26, second floor of a property sealed by the Certificate Officer for tax recovery. The Certificate Officer sealed the suite for attachment of assets to recover assessed dues of a company. The petitioner contested the sealing, claiming ownership of the suite and no liability for the company's dues.

Petitioner's Claim of Exclusive Ownership of Suite:
The petitioner, through his advocate, asserted exclusive ownership of suite No. 26, stating that his father, a former director of the defaulting company, had no connection to the suite in question. The petitioner argued that the sealing was unjustified as his father's directorship did not coincide with the period for which taxes were due, making the sealing arbitrary and without legal basis.

Liability of Petitioner's Father as Director of Defaulting Company:
The State Representative contended that the petitioner's father, as a director of the defaulting company during the relevant period, was liable for the proportionate tax dues. It was argued that the father's directorship overlapped with the period for which taxes were unpaid, justifying the attachment of assets to recover the dues.

Validity of Sealing and Unsealing Order:
The Tribunal noted discrepancies in the issuance of notice to the petitioner's father regarding the tax dues and the attachment of assets. It was observed that no formal notice was served on the father, and the sealing lacked legality as per the prescribed procedures. The Tribunal directed the unsealing of the suite, emphasizing that the respondents could still attach assets of directors as per the Companies Act, 1956, based on their share in the company.

The judgment ultimately disposed of the application without costs, ordering the immediate unsealing of suite No. 26. The decision clarified the authority of respondents to attach assets of directors in proportion to their share in the defaulting company, ensuring compliance with legal provisions while addressing the petitioner's claims and the Certificate Officer's actions.