2018 (8) TMI 877 - HC - VAT and Sales Tax

Attachment of agricultural land - the property to put on auction and the entire sale consideration will directly be paid to the VAT Department - It is the case on behalf of the applicants that one Bharat Gajera, who was to purchase the agricultural land being survey No.75, Block No.76, situated at Kumbhariya, Surat, had backed away and therefore, the applicants could not sale the said property and thereby could not deposit the amount of ₹ 4.51 crores with the Department. Held that - As it is now reported that even the proposed purchaser Kirit Bhimjibhai Patel is not ready and willing to purchase the agricultural land in question, Shri Ravani, learned Advocate appearing on behalf of the applicants does not press the present application and seeks permission to withdraw the same. Under the circumstances, the present application stands dismissed as withdrawn, as it is reported and it is not in dispute and it is an admitted position that the applicants and others have not acted as per the order passed in SCA No.2173 of 2017 and they have even not acted as per the undertakings given by them and as the aforesaid properties are in fact under attachment for the dues of the VAT Department, the properties mentioned hereinbelow, except property No.3 3/2885/C, Bhanawala Apartment, Salabatpura, Surat (which is the subject matter of SCA No.11249 of 2018) should now to be sold and put to auction by the Department to realize the amount due and payable to the Department. Now the Department to dispose of the aforesaid properties under attachment of this Court pursuant to order passed by this Court dated 28.03.2017 in SCA No.2173 of 2017 by public auction and realize the amount and the amount of sale consideration shall be appropriated towards dues of M/s.Dhru Automobiles. Till then, the aforesaid properties, except property at Sr. No.3-3/2885/C, Bhanawala Appartment, Salabatpura, Surat shall be continued under attachment. The Department now through public auction to realize the amount towards its dues at the earliest, but not later than 4 months from today. Application disposed off.

Summary

Issues Involved:
1. Attachment and sale of agricultural land for VAT dues.
2. Compliance with court orders and undertakings.
3. Sale and auction of attached properties.
4. Breach of undertakings and potential contempt proceedings.

Detailed Analysis:

1. Attachment and Sale of Agricultural Land for VAT Dues:
The applicants sought a writ of mandamus to lift the attachment on agricultural land (Survey No.75, Block No.76, Mouje Khumbariya, Taluka Choryasi, District Surat) to sell it and deposit the sale consideration with the Commercial Tax Department towards outstanding VAT dues of ?15,38,58,639/-. The court had previously allowed the sale of this property with the condition that the sale proceeds be deposited directly with the VAT Department.

2. Compliance with Court Orders and Undertakings:
The court noted that the applicants and others had not complied with the directions issued in SCA No.2173 of 2017, nor had they adhered to their undertakings. Specifically, they failed to deposit ?4.51 crores from the sale of the agricultural land within the stipulated time and did not pay the remaining dues in six equal monthly installments as agreed.

3. Sale and Auction of Attached Properties:
The court observed that the proposed purchaser of the agricultural land backed out, and the applicants could not sell the property or deposit the required amount. The court also noted that the applicants sold another commercial property in violation of their undertaking. Given the non-compliance, the court directed the Department to auction the attached properties to realize the outstanding dues. The properties listed for auction include:
- Agricultural Land (Survey No.75, Block No.76, Surat Kadodara Road, Moje Kumbhariya, Taluka Choriyasi, Surat)
- Residential Property (31-32, Sneh Smruti Co.op. Housing Society, Nr. Adajan Patia, Rander Road, Surat)
- Commercial Property (3/2885/C, Bhanawala Apartment, Salabatpura, Surat)
- Residential Property (Survey No.1266 to 1270, Hathiwala Jain Derasar Gali, Gopipura, Surat)
- Commercial Property (Ward No.11, Nondh No.203-204, Nr. Bank of Baroda, Bhagatalao Main Road, Surat)
- Industrial Property (542/paiki 32, Plot No.4-B and 5-B, Moje Village Dhamdachi, Valsad)

4. Breach of Undertakings and Potential Contempt Proceedings:
The court highlighted that the applicants had misused the indulgence shown by the court and breached their undertakings. The court mentioned that the Department might initiate appropriate contempt proceedings for these breaches. The court ordered the Department to auction the properties (except the one subject to SCA No.11249 of 2018) within four months to realize the dues.

Conclusion:
The court dismissed the application as withdrawn, noting the applicants' failure to comply with previous orders and undertakings. The court directed the Department to auction the attached properties to recover the outstanding VAT dues and left open the possibility of contempt proceedings for the breach of undertakings.