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TMI Blog2015 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets and liabilities of the Corporation, shall stand apportioned on the basis of population ratio. The petitioner has not acquired nor can acquire in view of above legal position any property from APBCL nor the liability thereof. The State of Telangana has acquired these assets and properties and liability of APBCL, being the recorded assessee proportionately. Therefore, it is absurd to contend that the writ petitioner is the successor in interest of APBCL. It does not appear from object clause of Memorandum of Association that it has acquired any rights, assets and properties of APBCL. Thus, the question of shouldering liability by the writ petitioner also does not arise. We are of the view that just because the petitioner paid tax dues on mistaken application of law, it cannot be precedent for recovery for the simple reason that illegal and wrongful action cannot be precedent, furthermore there cannot be estoppel as against provision of law. - actions taken by the Revenue against the writ petitioner are without jurisdiction and wholly illegal. In the event, State of Telangana does not pay the proportionate liability of the tax dues for the assessment year 2012-13 or previ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the 2nd respondent under the provision of Rule 26 (1) (iii) of the second schedule to the Income Tax Act, 1961 (hereinafter referred to as Act, 1961). It is contended that prior to the impugned prohibitory orders, the petitioner has never received any notice of assessment for the assessment year 2012-2013, and till date the petitioner does not receive any copy of the assessment orders for the same assessment year. As such, the 2nd respondent has no jurisdiction to commence tax recovery proceedings against the petitioner, as no notice was served on the petitioner during the assessment proceedings nor any assessment order was served upon the petitioner. No notice of demand was served upon the assessee under Section 156 of the Act, 1961. Since the respondents 2 and 3 have failed to serve notice of demand upon the petitioner as required under Section 156 of Act, 1961, they have no jurisdiction to commence the tax recovery proceedings against the assessee. Indeed, the petitioner cannot be called as an assessee in default under Section 220 of the Act, 1961, if the petitioner has not been served with the assessment order. The above impugned orders make a reference to the Tax Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treat the petitioner as the successor of APBCL for the purpose of serving assessment order. Nonetheless, the respondents treated the petitioner as successor of APBCL only for the purpose of tax recovery proceedings under the Scheme of Distribution of Assets and Liabilities, the income tax liabilities have to be borne by the Government of Andhra Pradesh and Government of Telangana respectively. The said scheme has been approved by the then Government of Andhra Pradesh vide G.O.Ms.No.239, Revenue (Ex.II) Department, dated 27.5.2014. Therefore, the attachment orders are arbitrary, unlawful and ultra vires the provisions of the Act, 1961. 3. In the counter-affidavit filed by the 2nd respondent, it has been stated to justify the aforesaid order that the petitioner is the successor in business of APBCL as per Section 53 read with Section 68 of the Act 2014, in respect of the territories falling in the State of Telangana. As a result of reorganization of the State, as per State Government G.O.Ms.No.187, Revenue (Ex.II) Department, dated 16.5.2014, a new Corporation was incorporated in the name and style of M/s. Telangana State Beverages Corporation Limited (TSBCL), having its register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rules 20 26 (1) (iii) of the second schedule to the Act, 1961. As per the provision of Section 170 (3) of the Act, 1961, the assessing officer has recorded its finding vide letter dated 18.2.2015 wherein it was stated that IML/FL sale proceeds, including the margins, are directly being credited into the treasury account of the State Government as per G.O.Ms.No.614, Revenue [Ex.II (2)] Department, dated 6.5.2005. A clear finding was recorded by the assessing officer that the income tax dues pertaining to the share of TSBCL, successor in business, has to be recovered from it by the Tax Recovery Officer, on being referred to him. Hence, there is no requirement of serving a demand notice or assessment order on TSBCL. After reference is made to the Tax Recovery Officer by the assessing officer, then the proceedings of the Tax Recovery Officer can be initiated by him even though he has not served a demand notice or assessment order on the petitioner. Therefore, the proceedings and the jurisdiction of the Tax Recovery Officer are valid. Notice under Rule 2 of the second schedule to the Income Tax Act has been issued to the assessee. Even though the tax recovery certificate was drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner is not a transferee or the successor in interest of APBCL under the provisions of Act, 2014. Nothing has been succeeded by this petitioner as far as the assets and liabilities of the erstwhile APBCL is concerned. 6. Mr. J.V. Prasad, the learned Counsel for the Revenue, on the other hand, justifies the action, and contends that it would appear from the provision of Act, 2014, this writ petitioner is the successor in interest of APBCL, as such by virtue of Section 226 (3) (iii) read with Section 170 (3) of the Act, 1961, the proportionate share of the liabilities can be recovered from the writ petitioner. It would appear from the records that the petitioner is the successor in interest as far as the assets and properties and businesses are concerned. Therefore, notices issued and order of attachment made are perfectly justified under the law. 7. After hearing the learned counsel for the parties and considering the statements and averments made in the pleadings and perusing the necessary documents, the only question that arises in these two cases is whether any recovery proceedings can be initiated against the writ petitioner for the alleged income tax dues as claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he existing State of Andhra Pradesh, where such undertaking or part thereof is exclusively located in, or its operations are confined to, a local area, shall pass to the State in which that area is included on the appointed day, irrespective of the location of its headquarters: Provided that where the operation of such undertaking becomes inter- State by virtue of the provisions of Part II, the assets and liabilities of (a) the operational units of the undertaking shall be apportioned between the two successor States on location basis; and (b) the headquarters of such undertaking shall be apportioned between the two successor States on the basis of population ratio. (2) Upon apportionment of the assets and liabilities, such assets and liabilities shall be transferred in physical form on mutual agreement or by making payment or adjustment through any other mode as may be agreed to by the successor States. 68. Provisions for various companies and corporations:- (1) The companies and corporations specified in the Ninth Schedule constituted for the existing State of Andhra Pradesh shall, on and from the appointed day, continue to function in those areas in respect of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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