2017 (4) TMI 75 - HC - VAT and Sales Tax

Attachment of properties - the said properties are sold to clear the outstanding dues due and payable by the petitioners /firm - Held that - The request made by the petitioners /partners of the firm seems to be reasonable and bonafide. It appears that the petitioners and the partners of the firm want to clear the dues and make the payment by selling their property, which are under attachment and even other properties belonging to their family members, however, they pray for reasonable installments - The respondent authorities are directed to lift the attachment as soon as the petitioners sell any of the properties located at Serial Nos.2 to 6 and deposits the entire consideration from sale of any of the said properties to the Government /Department - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Attachment and sale of property to clear tax arrears.
2. Quashing of the auction notice.
3. Reserve price for auction.
4. Suspension of registration certificate under VAT Act.
5. Granting installments for payment of outstanding dues.

Issue-wise Detailed Analysis:

1. Attachment and Sale of Property to Clear Tax Arrears:
The petitioners requested the court to direct the respondents to lift the attachment on property located at Block No.76, Survey No.75, Kumbhariya, Taluka Choryasi, District Surat, and allow its sale to Mr. Bharat Parshottambhai Gajera. The petitioners proposed to deposit the entire sale proceeds towards tax arrears under the Entry Tax Act. The court noted that the petitioners do not dispute their liability to pay a total amount of ?15,38,58,639/- towards Value Added Tax and Entry Tax with interest. The petitioners agreed to sell the agricultural land for ?4.51 Crores and deposit this amount with the Department. The court directed that upon deposit of ?4.51 Crores, the attachment over the agricultural land would be lifted.

2. Quashing of the Auction Notice:
The petitioners sought to quash the impugned auction notice dated 07/02/2017. The court's judgment did not specifically address this issue as the primary focus was on the petitioners' proposal to sell their property and clear the dues in installments.

3. Reserve Price for Auction:
In an alternative plea, the petitioners requested that the reserve price for the auction of the property should not be fixed below ?4.51 Crores. The court did not explicitly address this issue in the judgment since the petitioners' proposal to sell the property directly was accepted.

4. Suspension of Registration Certificate under VAT Act:
The petitioners sought to quash the impugned order dated 28/10/2016, which suspended their registration certificate under the VAT Act. The court directed that upon deposit of ?4.51 Crores, the registration certificate of the firm under the VAT Act should be restored. However, if the remaining outstanding dues were not paid within six months in equal monthly installments, the registration certificate would be automatically canceled.

5. Granting Installments for Payment of Outstanding Dues:
The petitioners requested the court to grant them installments to pay the outstanding dues under the Entry Tax Act and to allow them to continue their business by restoring their registration certificate. The court found the petitioners' request reasonable and directed that the remaining outstanding dues be paid in six equal monthly installments commencing from April 2017. The court also ordered that the residential property and other properties listed should remain under attachment until the dues were fully paid.

Conclusion:
The court disposed of the petition with several directions and observations. The petitioners were required to deposit ?4.51 Crores within one month by selling the agricultural land, after which the attachment on the land would be lifted. The remaining dues were to be paid in six equal monthly installments. The registration certificate would be restored upon the initial deposit but would be canceled if the dues were not cleared within six months. The court directed that the properties listed in the petition remain under attachment until the dues were fully paid, and the attachment would be lifted as the properties were sold and proceeds deposited with the Department.