2019 (12) TMI 1015 - HC - VAT and Sales Tax

Recovery proceedings - coercive steps against the petitioners - garnishee notice - HELD THAT - Out of the group of matters similarly situated it is the only present matters where garnishee notice has been issued by the Respondents. On the last occasion we had called upon the learned AGP to inform the Court whether there is any specific reason for issuing garnishee notice to the present Petitioner when it was not so issued to the other petitioners. The only answer of the learned AGP is that the Officer waited for some time and since there was no ad-interim order a garnishee notice was issued. Therefore we see no special reason why the garnishee notice was issued to the present Petitioner. The position is that none of the similarly situated Petitioners have deposited any amount pursuant to the assessment orders against them as all are awaiting the conclusion of the reference. To maintain parity amongst all the similarly situated petitioners and in view of the statement made by the learned Advocate General we do not find it necessary that the mandate placed upon the Petitioner should continue further. There shall be ad-interim order in terms of prayer clause (f)(i) of the petitions. The earlier statement made by learned AGP regarding State not taking any coercive steps would continue - Awaiting decision of the Larger Bench stand over to 5 March 2020.

Summary

Issues Involved:
Challenges to the validity of the Maharashtra Tax (Amendment and Validation) Act, 2017 and its provisions; Modification of ad-interim order regarding garnishee notice; Financial viability of the Petitioner.

Analysis:

1. Challenges to the Validity of the Maharashtra Tax Act:
The petitioner raised challenges to the validity of the Maharashtra Tax (Amendment and Validation) Act, 2017 and its provisions. A Division Bench referred the issue, along with others, to a Larger Bench due to a disagreement with a previous judgment. The State agreed not to take coercive steps against the petitioners during this period. Interim applications were filed seeking modification of the ad-interim order, with the petitioner expressing concerns about potential prejudice due to a garnishee notice. The State confirmed its commitment to not take coercive steps and left the decision on using the amount in the petitioner's account to the court.

2. Modification of Ad-Interim Order:
The petitioner sought modification of the ad-interim order concerning a garnishee notice, citing potential severe prejudice if not stayed. The State assured it was not proceeding to recover any amount and left the decision on using the amount in the petitioner's account to the court. The court, after considering the financial viability of the petitioner and lack of reasons for the garnishee notice, decided to maintain parity among similarly situated petitioners and allowed the use of the locked amount for the petitioner's daily functioning.

3. Financial Viability of the Petitioner:
The court acknowledged the financial viability of the petitioner, as evidenced by an additional affidavit submitted. The State did not contest the affidavit, and the court accepted the petitioner's financial stability. It was noted that the petitioner was not a new entity and that recovery of the amount in case of appeal failure was feasible. In light of this, and to maintain parity among petitioners, the court allowed the use of the locked amount for the petitioner's functioning.

Conclusion:
The court, pending a decision from the Larger Bench, allowed the modification of the ad-interim order and permitted the use of the amount in the petitioner's account for daily functioning. The State's commitment to not take coercive steps was reiterated, and the matter was adjourned to a later date for further proceedings.