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TMI Blog2012 (3) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... a position to point out any statutory provision empowering the sales tax authorities to fasten the liability of company on its directors in the matter of payment of sales tax dues. There appears to be substance in the submission made on behalf of the petitioners that section 26 containing the said provision regarding liability to pay tax in certain cases covers several contingencies such as the liability in respect of the business carried on by an individual dealer after his death, the liability in respect of the dues where the dealer was an HUF and there is partition amongst various members or group of members; there is dissolution of a partnership firm and also in case of transfer of business in whole or in part. Unlike section 179 of the Income-tax Act, 1961, there is no provision in the Sales Tax Act fastening the liability of the company to pay its sales tax dues on its directors. - Special Civil Application No. 243, 3103,7578 of 1991 - - - Dated:- 21-3-2012 - SHAH M.S., J. M.S. SHAH J. Special Civil Application No. 243 of 1991 challenges the constitutional validity of sub-section (4A) of section 47 of the Gujarat Sales Tax Act, 1969, on the ground that the said prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date and ending on the date of payment of the amount of tax, simple interest at the rate of twenty four per cent per annum on the amount of tax not so paid or on any less amount thereof remaining unpaid during such period: Provided that where a penalty is levied under sub-section (6) of section 45 in respect of the difference and the period referred to in that sub-section, no interest shall be payable under this sub-section on such difference for such period. However, by Amendment Act No. Guj. 20 of 2001, section 6, the rate of interest is reduced from 24 per cent to 18 per cent with effect from September 1, 2001. As regards challenge to the constitutional validity of sub-section (4A) of section 47 of the Act, our attention is invited to the decision of another Division Bench of this court in Ashapura Mineral Company v. State of Gujarat [1993] 89 STC 289 (Guj), wherein the same challenge was raised before this court. After examining the provisions under challenge and the relevant authorities and after examining various submissions, this court turned down the challenge and held as under: Section 47(4A) of the Gujarat Sales Tax Act, 1969, which provides for payment of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of excess tax paid either voluntarily by the dealer or as a result of an assessment order had to pay lower rate of interest under section 54 of the Act. The court negatived the contention about discriminatory treatment and held that the dues of the Government of a State being the dues of the entire people of the State, there is a valid basis for differentiation between dues of the Government of a State and dues of an individual. Whereas the State Government utilises its funds for public welfare, an individual ordinarily uses money for his private purposes. Hence, the Legislature was justified in treating the State Government as a separate class and providing for a higher rate of interest on the dues of the Government of the State. In view of the aforesaid pronouncement of this court, the prayers challenging the constitutional validity of the provisions of sub-section (4A) of section 47 of the Gujarat Sales Tax Act, 1969 are hereby rejected. Coming to the second controversy involved in Special Civil Application No. 243 of 1991 and also in Special Civil Application No. 7578 of 1991, Mr. Hasurkar and Mr Mankad, learned counsel for the petitioners, have submitted that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals), Baroda, has informed the concerned Sales Tax Officer at Godhra that the appeal filed by Choksi Plastics Pvt. Ltd., was being dismissed on account of non-compliance with the order for deposit of the sales tax dues of the said company, but it appeared that the financial position of the directors of the said company was good and it was possible to recover the dues from the said directors. Hence, appropriate action may be taken for recovery of sales tax dues of the said company in accordance with law. It appears that it is on the basis of the aforesaid communication that the Sales Tax Officer, Godhra and the Recovery Officer proceeded against the personal properties of the directors of Choksi Plastic Pvt. Ltd. Similarly, in Special Civil Application No. 7578 of 1991 nothing is brought to our notice to indicate that the concerned authority had taken any conscious decision to fasten the company's liability on the directors of the company personally or on their properties. In view of the above factual position, it is not necessary to examine the controversy at length. Suffice it to state that the respondents are not in a position to point out any statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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