9911796707
TMI Blog2014 (9) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... r manufacturer may apply before the competent authority for grant of eligibility certificate and for exemption from payment of tax or for reduction in the rate of tax for the unexpired portion of the period for which exemption was granted to the former manufacturer. Condition imposed by the competent authority was accepted by the petitioner and that the petitioner availed the exemption from payment of trade tax for the remaining period. The petitioner, however, did not pay the tax of the earlier period which was required to be paid by the the earlier manufacturer and which became jointly and severally payable by the petitioner under the provisions of Section 3-C(2) of the Act by the petitioner - The petitioner cannot now turn around and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Corporation of Uttar Pradesh Ltd. (hereinafter referred to as PICUP ). The recovery proceedings were also initiated by the PICUP and on 25.1.2003, pursuant to a tacit understanding between the trade tax authorities with PICUP, the unit of respondent No.4 was attached under Section 29 of the State Financial Corporation Act. It is alleged that in these attachment proceedings the trade tax authorities and PICUP agreed that the proceeds of the auction would be disbursed in adequate proportions between the two departments. After the attachment, an advertisement was issued by PICUP inviting offers for sale of the assets of the unit. The petitioner made an offer of ₹ 172.50 Lakhs, which was accepted and an agreement to sell was entered be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the petitioner contended that the assets of respondent No.4 was purchased pursuant to the proceedings initiated under Section 29 of the State Financial Corporation Act, which was free from all encumbrances and, consequently, the liabilities of respondent No.4, which is a going concern, could not be recovered from the petitioner merely because some of the assets of respondent No.4 had been purchased by the petitioner. The arguments of the learned counsel for the petitioner appears to be attractive in the first flush, but on a closer scrutiny, we find that the stand of the petitioner is untenable for the following reasons. We find from a perusal of the counter affidavit that the erstwhile Company was granted an exemption und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch manufacturer and successor manufacturer for the purpose of liability of tax shall be treated as the transferor and the transferee under Section 3-C. Provided also that in computing the unexpired portion of the period, the period during which the production of successor manufacturer remains closed on account of an order passed by any Court or Board for Industrial and Financial Reconstruction or Appellate Authority for Industrial and Financial Reconstruction shall be excluded. From a perusal of the aforesaid provision, it is clear, that where there is a discontinuation of business of the manufacturer, who was eligible for exemption, the successor manufacturer may apply before the competent authority for grant of eligibility certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuted as well as partners or members of the firm or association, as it existed before re-constitution, shall jointly and severally be liable to pay tax including penalty, if any, due from such firm or association for any period before its reconstitution. (2) Liability to tax of transferee.- Where the ownership of the business of any dealer liable to pay tax is transferred, the transferor and the transferee shall jointly and severally be liable to pay the tax including penalty, if any, payable in respect of such business till the time of such transfer, whether the assessment is made or the penalty is imposed prior to or after such transfer. (3) Where a tax including penalty, if any, is recovered from a re-constituted firm or associatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, did not pay the tax of the earlier period which was required to be paid by the the earlier manufacturer and which became jointly and severally payable by the petitioner under the provisions of Section 3-C(2) of the Act by the petitioner. The petitioner cannot now turn around and contend that the said condition imposed was arbitrary or opposed to public policy or the condition was in contravention to the provision of sub-Clause (2) of Section 3-C of the Act. The petitioner is estopped from raising such contention at this stage, for the reason that having availed the exemption the petitioner cannot turn around and contend that at this belated stage that the said condition is a nullity being violative of the provisions of the Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
