2012 (3) TMI 372 - HC - VAT and Sales Tax

Attachment and sale of property - whether for the purpose of recovery of sales tax dues under the Gujarat Value Added Tax Act and Gujarat Sales Tax Act against a private limited company, the personal property belonging to the managing director of such company can be attached and sold for realisation of the dues against the company - Held that - it is not the case of the State that the property in question at any point of time belonged to the company nor is it the case that the managing director is holding property as benamdar . In that view of the matter, we find substance in the contention of the learned counsel Mr. Kaji appearing on behalf of the petitioner that the attachment and proposed auction of the residential building No. 56, Near Hanuman Temple, Valinath Mahadev Road, Kalol, was on the face of it without jurisdiction - Following decision of Choksi v. State of Gujarat 2012 (3) TMI 392 - GUJARAT HIGH COURT - Decided in favour of assessee.

Summary

Issues: Recovery of sales tax dues against a private limited company by attaching personal property of the managing director.

In this judgment by the Gujarat High Court, the main issue was whether the personal property of the managing director of a private limited company could be attached and sold for the recovery of sales tax dues under the Gujarat Value Added Tax Act and Gujarat Sales Tax Act. The court examined the case and found that the property in question did not belong to the company at any point, nor was the managing director holding it as a "benamdar." The court referred to a previous Division Bench decision and concluded that the attachment and proposed auction of the residential building were without jurisdiction. As a result, the court quashed the notification for holding the auction of the property and restrained the respondents from attaching or selling any private property of the managing director for the realization of the dues, while allowing proceedings against the company's property. The writ application was disposed of with no order as to costs.