2022 (4) TMI 1356 - HC - VAT and Sales Tax

Recovery of dues of the bank as well as the commercial tax authority - section 33 (2) of the VAT Act, 2002 - HELD THAT - Since the matter remained pending for almost a period of 9 years before this Court, it is deemed proper to direct the petitioner as well as respondent no.3 herein to move an application under section 33 (2) of the VAT Act, 2002 before the Commissioner, Commercial Tax taking all possible grounds including ground and objection to their respective rival claims. The petitioner/bank shall also have liberty to raise the objections as regards the right of the respondent no.3 to deposit the commercial tax dues. On such application being filed by the petitioner as well as respondent no.3, Additional Commissioner, Commercial Tax, Indore i.e. respondent no.2 herein shall consider and decide both the applications of the petitioner and respondent no.3 respectively within a period of three months without being influenced by its earlier order dated 31/10/2012 which is contained in Annexure P/4 to the writ petition. The writ petition stands disposed of.

Summary

Issues:
Challenge to communication dated 04/03/2013 by respondent no.2, subsequent communication dated 29/07/2013, recognition of respondent no.3 as buyer of property, deposit of statutory dues, rights of petitioner/bank and respondent no.3, application under section 33 (2) of VAT Act, 2002, disposal of writ petition.

Analysis:
The petitioner initially challenged the communication dated 04/03/2013 issued by respondent no.2, which led to a series of events involving a loan default by BTCL Company, negotiations with respondent no.3 for the purchase of a secured asset, and disputes over encumbrances and statutory dues. The Single Bench and Division Bench of the Court granted liberty to the bank and respondent no.3 to approach the Commercial Tax Authority under section 33 (2) of the VAT Act, 2002. However, a subsequent notification dated 4/03/2013 directed respondent no.3 to deposit arrears of statutory dues, later amended by a communication dated 29/07/2013 deleting crucial paragraphs.

The petitioner contended that the subsequent communication recognized respondent no.3 as the buyer of the property, despite non-payment of the agreed consideration during negotiations. In contrast, respondent no.3 claimed to have deposited a partial sum and expressed readiness to clear all statutory dues, highlighting previous failed attempts under section 33 (2) of the VAT Act, 2002. The State argued that the subsequent communication was innocuous, rendering the writ petition infructuous.

Upon review, the Court acknowledged the earlier litigation and orders granting liberty to both parties to seek relief under section 33 (2) of the VAT Act, 2002. The Court directed the petitioner and respondent no.3 to file applications before the Commercial Tax Authority, emphasizing the need to address all grounds and objections. The Additional Commissioner was instructed to decide on the applications within three months, without influence from prior orders. The petitioner was granted liberty to proceed under the SARFAESI Act for recovery of dues against respondent no.3.

The Court clarified that it did not express any opinion on the parties' rights or the case's merits. The challenge to the subsequent communication dated 29/07/2013 was kept in abeyance pending the outcome of the applications under section 33 (2) of the VAT Act, 2002. With these directions, the writ petition was disposed of, emphasizing the importance of due process and fair consideration of the parties' claims.