2021 (2) TMI 299 - HC - VAT and Sales Tax

Recovery proceedings - Attachment of registered property of the petitioners - Section 152 of Bombay Land Revenue Code, 1879 - whether the impugned notice under Section 152 of the Bombay Land Revenue Code, 1879 could have been issued for the purpose of recovery of tax as determined, pending the appeal and the stay application before the Gujarat Value Added Tax Tribunal at Ahmedabad? - HELD THAT - It is not in dispute that the appeal and the stay application is pending as on date before the Tribunal. We are of the view that as the appeal and the stay application is yet to be adjudicated by the Tribunal, there should not be any further proceedings under Section 152 of the Land Revenue Code. In fact, we may observe that no such notice under Section 152 of the Code could have been issued. Thus, at-least till the stay application is disposed of, the department should not initiate any action for the purpose of recovering the tax demand. The impugned notice dated 18.07.2019 issued by the respondent no.2 under Section 152 of the Land Revenue Code is quashed - application disposed off.

Summary

Issues:
1. Validity of notice under Section 152 of Bombay Land Revenue Code, 1879 for recovery of tax during appeal and stay application.

Analysis:

The writ application sought relief to quash an impugned notice issued for attachment of property pending appeal and stay application before the Gujarat Value Added Tax Tribunal. The main issue was whether the notice under Section 152 of the Bombay Land Revenue Code, 1879 was valid for tax recovery during the appeal process. The Court heard arguments from both parties, highlighting the petitioner's withdrawal of the appeal before the VAT Tribunal, leading to the stay application being disposed of. However, the petitioner later filed a fresh appeal before the Tribunal, which was pending. The petitioner argued against coercive recovery actions until the appeal and stay application were resolved, citing violations of fundamental rights. The Court noted that the appeal and stay application were still pending before the Tribunal, emphasizing that no further action under Section 152 of the Land Revenue Code should proceed until Tribunal adjudication. The Court referenced legal precedents supporting the view that tax recovery actions should be stayed until the appeal process concludes.

The Court ultimately quashed the impugned notice issued under Section 152 of the Land Revenue Code, directing the Tribunal to proceed with the appeal and stay application in due course. The judgment emphasized the importance of awaiting the Tribunal's decision before initiating any recovery proceedings. The writ application was disposed of with these directions, ensuring that the appeal process would be given precedence in accordance with the law.