2016 (9) TMI 329 - HC - Service Tax

Confirmation of auction bidding - Removal of aircraft highest bid below reserved price bonafides of the service tax commissionerate and the attempts made till date - Held that - the casual attitude of the Service Tax Commissionerate is not approved, for it ought to indicate with clarity, precision and completeness how the auction was finalised and what are its detailed terms and conditions - to test the bona fides of the auction purchaser and to enable him to complete the auction by depositing the balance amount, the matter is placed for decision - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Direction to remove the aircraft expeditiously.
2. Approval for finalizing auction of the aircraft.
3. Payment of dues and penalties by auction purchaser.
4. Confirmation of sale and completion of formalities.
5. Air-worthiness and repairs required for the aircraft.

Analysis:

1. The petitioner filed a petition seeking direction to remove the aircraft promptly. The Additional Commissioner of Service Tax-V, Mumbai Commissionerate received bids for the auction, with the highest bid from M/s. SGI Commex Limited. The auction result was submitted for approval to the Court, as the aircraft could not be sold despite previous attempts.

2. The Court heard arguments from the Service Tax Commissionerate, original petitioners, and respondent No.3 regarding the auction. Respondent No.3 acknowledged the bid being below the reserved price but did not doubt the Commissionerate's efforts. The petitioners emphasized the need for swift removal of the aircraft to ensure smooth airport operations.

3. The petitioners requested that charges and penalties imposed on the aircraft company for exceeding permissible limits be borne by the auction purchaser. However, they reserved the right to recover these amounts in accordance with the law. The Court allowed the Commissionerate to confirm the sale to the highest bidder, M/s. SGI Commex Limited, with instructions to complete formalities promptly.

4. The Court expressed dissatisfaction with the lack of clarity in finalizing the auction and emphasized the need for detailed terms and conditions to be communicated clearly to the highest bidder. It directed the auction purchaser to potentially appear before the Court to provide necessary statements, ensuring all legal rights and contentions are preserved.

5. The Court highlighted the necessity for the auction purchaser to demonstrate bona fides by depositing the balance amount and set a future date for further proceedings to test the purchaser's commitment. The Court's decision aimed to safeguard the interests of all parties involved and ensure a transparent and lawful conclusion to the auction process.