9911796707
TMI Blog1997 (6) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... een averred in the writ petition, in short, as follows. On October 18, 1989, the petitioner entered into an agreement (annexure 1) with M/s. Jai Food Industries for purchase of land and building for Rs. 11,41,000. On October 23, 1989, another agreement (annexure 1-A) was entered into in between them for the purchase of machinery for Rs. 1,61,000 and raw materials for Rs. 11,960. Dues of Rajasthan Financial Corporation (in short "RFC") and the State Bank of Bikaner and Jaipur (in short "SBBJ") to the extent of Rs. 44,400 and Rs. 2,70,542 (Rs. 2,09,205 + Rs. 61,337) respectively were outstanding against M/s. Jai Food Industries, Ajmer. Their movable and immovable properties were pledged/hypothecated with RFC as a first charge and with SBBJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued. The petitioner was threatened by the respondent No. 2 for depositing the said amount. It has become difficult for the petitioner to carry on its business. 3.. The State of Rajasthan (respondent No. 1) and the Commercial Taxes Officer (the respondent No. 2) have filed their joint reply admitting that the petitioner has purchased the land, building, machinery and raw materials belonging to M/s. Jai Food Industries, Ajmer, with the dues of the RFC and SBBJ outstanding against the firm. It has further been averred thus: The business of M/s. Jai Food Industries, Ajmer had been purchased by the petitioner and is liable under section 9 and 11AAA of the Act to pay the outstanding dues of the department. It is not open to the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the petitioner that the petitioner had not purchased the business of M/s. Jai Food Industries, Ajmer, it bona fidely purchased its assets for valuable consideration without knowledge of the dues of the Commercial Tax Department and as such is not liable to pay the outstanding dues under sections 9 and 11AAA of the Act. He relied upon item No. 40 of 80 STC 12* (From Our Reporter at the Supreme Court). 6.. In reply, it has been contended by the learned counsel for the department that the petitioner was aware of the amount of tax outstanding against M/s. Jai Food Industries, Ajmer, when the building, machineries and raw materials belonging to M/s. Jai Food Industries were purchased by it. The transactions were not bona fide and in good fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f made for valuable consideration and without notice of the pendency of proceedings under this Act." 9.. There is nothing on the record to show that the ownership of the entire business of M/s. Jai Food Industries, Ajmer was purchased by the petitioner. In the notice annexure 6, it is not stated that entire business of M/s. Jai Food Industries, Ajmer has been purchased by the petitioner. The agreements, annexures 1, 2 and 5, simply show that the building, machineries and raw materials were purchased by the petitioner. As such above quoted provisions of section 9 of the Act are not attracted in this case. Reference of Kanhaiya Lal v. State of Rajasthan [1992] 86 STC 30 (Raj) may be made here. 10.. The agreement (annexure 5) dated Februar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Jai Food Industries, Ajmer. It is also not stated in it that this purchase was made with a view to defraud the Revenue. The shed of the factory of M/s. Jai Food Industries, Ajmer was leased out by the RIICO to the petitioner on February 12, 1990 vide agreement, annexure 5A, and other properties were sold to the petitioner by the RFC in pursuance of the agreement to sale dated December 15, 1990, annexure 5. As such the writ petition deserves to be allowed. 11.. Accordingly, the writ petition is allowed and the notice dated December 12, 1990 (annexure 6) is quashed. It is held that the assets of M/s. Jai Food Industries, Ajmer have been purchased by the petitioner with valuable consideration and without notice of the outstanding dues of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout jurisdiction. That would grant the petitioner all the relief that he seeks. The writ petition is to be allowed in terms of the relief sought. 16.. The question of whether the transfer in question attracts the provisions of section 9, R.S.T. Act in my view does not arise out of the facts of this case even though the respondents Nos. 1 and 2 in their reply and therefore the petitioner in his rejoinder may have referred to it. The material on record is also not adequate to decide this point. I am therefore unable to associate myself with the views expressed by the honourable Chairman regarding the non-applicability of section 9 of the R.S.T. Act in the facts and circumstances of this case. 17.. In my view the writ petition is to be al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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