2014 (8) TMI 926 - HC - VAT and Sales Tax

Auction of properties for recovery of sales tax dues - proceedings for auctioning the properties are initiated without giving an opportunity of being heard to the petitioner - Held that - It appears that on behalf of the petitioner, the properties which are sought to be auctioned under the provisions of the Bombay Land Revenue Code are in the name of the petitioner. It is also the case of the petitioner that the properties, even as on today, stands in the name of the petitioner alone. It is, therefore, submitted that when the petitioner is the absolute owner of the properties which are sought to be auctioned (vide notification dated 2.2.2010 under sec. 165 of the Bombay Land Revenue Code), at least the petitioner was required to be given an opportunity of being heard before attaching the properties and putting it in auction. Mr. Jaimin Gandhi learned AGP tried to oppose the present petition relying upon affidavit-in-reply. However, he is not disputing that before attaching the properties/lands in question and/or putting it to an auction no opportunity of hearing was given to the petitioner. - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Quashing of Notification for Auctioning Properties under Bombay Land Revenue Code without Opportunity of Hearing.

Analysis:
1. Issue of Quashing Notification: The petitioner sought to quash a notification issued under section 165 of the Bombay Land Revenue Code, 1879, for auctioning properties to recover sales tax dues of a specific entity. The petitioner, being the son of the entity's proprietor, challenged the auction without being heard.

2. Opportunity of Being Heard: The advocate for the petitioner argued against auctioning the properties, emphasizing the lack of opportunity for the petitioner to present their case. The High Court refrained from delving into the merits of the case but noted the absence of a hearing before initiating auction proceedings.

3. Ownership of Properties: The petitioner claimed absolute ownership of the properties listed in the notification. It was highlighted that the properties belonged solely to the petitioner, and no opportunity for a hearing was provided before attaching or auctioning them. The respondent did not contest the absence of a hearing before taking action.

4. Judgment and Quashing of Notification: The High Court allowed the petition, quashing the impugned notification due to the violation of principles of natural justice. The Court granted liberty to the department to proceed lawfully and with proper hearing if they intended to attach or auction the properties in question in the future.

5. Final Decision: The Notification dated 2.2.2010 was set aside, emphasizing the importance of adhering to natural justice principles. The Court ruled in favor of the petitioner, highlighting the necessity of providing a fair hearing before taking actions such as attaching or auctioning properties. The department was directed to follow due process and grant a full opportunity of hearing to the petitioner in any future proceedings.