2019 (8) TMI 951 - HC - VAT and Sales Tax

Stay on recovery - transfer of the attached property by way of relinquishment - Whether the relinquishment of the share in the attached property by the husband in favour of the writapplicant could be termed as fraudulent transfer or not - HELD THAT - will be looked into by the first appellate authority. The fact remains that as on date the first appeal is pending and the matter is being looked into on the merit. The recovery has also been stayed. Rule be issued to the respondents returnable on 16/10/2019 .

Issues:
1. Validity of charge entered under the Vat Act on a residential property.
2. Allegation of fraudulent transfer under Section 47 of the Act.
3. Stay on recovery for assessment years by the first appellate authority.
4. Opposition to the writ-application by the learned AGP.
5. Jurisdiction of the first appellate authority in determining fraudulent transfer.

Issue 1: Validity of charge under the Vat Act:
The writ-applicant sought relief to withdraw the charge entered under the Vat Act on a specific property. The husband of the applicant relinquished his share in the property to the wife, which was deemed a fraudulent transfer by the respondents. The property was attached, and the first appeal against the assessment order was pending before the appellate authority. The recovery for all assessment years had been stayed by the first appellate authority, leading to a request for removal of the attachment.

Issue 2: Allegation of fraudulent transfer:
The respondents alleged that the husband's relinquishment of his share in the property to the wife constituted a fraudulent transfer under Section 47 of the Act. The matter was to be examined by the first appellate authority, as the first appeal was pending, and the recovery had been stayed. The writ-applicant's counsel argued that determining the fraudulent transfer under Section 47 of the Act was beyond the jurisdiction of the first appellate authority, suggesting that a civil suit might be necessary for such a declaration.

Issue 3: Stay on recovery by the first appellate authority:
The recovery for all assessment years had been stayed by the first appellate authority, prompting the writ-applicant to request the removal of the attachment on the property. The opposition by the learned AGP indicated a dispute over the validity of the attachment and the alleged fraudulent transfer, leading to the need for further adjudication.

Issue 4: Opposition by the learned AGP:
The writ-application faced opposition from the learned AGP representing the respondents. The AGP contested the claims made by the writ-applicant and argued for the validity of the attachment and the allegations of fraudulent transfer. The AGP's opposition added complexity to the case, necessitating a thorough examination by the court.

Issue 5: Jurisdiction of the first appellate authority:
The jurisdiction of the first appellate authority in determining the alleged fraudulent transfer under Section 47 of the Act was questioned. The writ-applicant's counsel argued that such a determination might require a civil suit for a formal declaration. The court acknowledged the pending appeal and the stay on recovery, highlighting the need for a comprehensive review of the matter.

This detailed analysis of the judgment covers the various issues involved in the case, including the validity of the charge under the Vat Act, the allegation of fraudulent transfer, the stay on recovery by the first appellate authority, the opposition by the learned AGP, and the jurisdiction of the first appellate authority in determining the fraudulent transfer. The court's decision to issue a rule to the respondents and prevent the auction of the attached property pending final adjudication reflects the complexity of the legal issues at hand.

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