2021 (2) TMI 1105 - HC - VAT and Sales Tax

Attachment of immovable property - It is the case of the Department that it proceeded to attach the immovable property in question as it is the estate of the deceased (original assessee). On the other hand, the case of the writ applicant is that, it is not the estate of his deceased father, but it is his self acquired property - HELD THAT - Let Notice be issued to the respondents, returnable on 09.03.2021. Mr. Kathiriya, the learned AGP waives service of Notice for the State Respondents. Mr. Kathiriya shall file reply prima facie pointing out that the materials on record indicate that the immovable property in question is the estate of the deceased.

Summary

Issues:
1. Interpretation of Section 57 of the Gujarat Value Added Tax Act, 2003 regarding liability to pay tax in certain cases.
2. Determination of whether the immovable property in question is part of the deceased's estate or self-acquired property of the writ applicant.

Analysis:
1. The High Court examined the application of Section 57 of the GVAT Act, which deals with the liability to pay tax when a dealer passes away. The court noted that the Department sought to hold the son of the deceased liable for the outstanding tax amount of ?1,53,00,000 under this section. The provision states that the legal representative shall pay the tax, penalty, or interest due from the deceased out of the estate, to the extent it can cover the charges. The court acknowledged the dispute between the Department and the writ applicant regarding the interpretation and application of this provision.

2. The Court delved into the crucial issue of whether the immovable property in question was part of the deceased father's estate or the self-acquired property of the writ applicant. The Department claimed that the property was part of the deceased's estate, justifying the attachment to recover the outstanding tax amount. In contrast, the writ applicant argued that the property was his self-acquired asset and not subject to the tax liability of his deceased father. The Court directed the State Respondents to provide a reply indicating whether the property was indeed part of the deceased's estate based on the materials on record.

In conclusion, the judgment revolves around interpreting Section 57 of the GVAT Act to determine the liability to pay tax after a dealer's demise and resolving the dispute over the nature of the immovable property in question. The Court's decision will hinge on whether the property is deemed part of the deceased's estate, making the writ applicant liable for the outstanding tax amount, or if it is confirmed as his self-acquired property, thereby absolving him from the tax obligation. The case highlights the complexities of tax liability transfer in cases of deceased dealers and the importance of clarifying ownership of assets to determine tax responsibilities accurately.