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TMI Blog2016 (4) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... ari or any other appropriate writ, order or direction quashing and setting aside the attachment notice dated 11.12.2013, the letter dated 20.05.2014 and the order dated 01.09.2015 at ANNEXURE J (Colly), and Annexures H respectively; (B) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus, or any other appropriate writ, order or direction directing the respondent No.4-Corporation to effect the change in the constitution of Board of Directors of the petitioner company as sought for by the petitioner company, without insisting for compliance with the condition of obtaining NOC from the Central Excise Department;" 3. The facts, as emerging from the averments made in the petition, are that pursuant to an application made on 29.6.1990 by one Tehelram Thakordas Arora for allotment of Plot No.821 in the Sachin Industrial Area consisting of Revenue Survey No.299 within the village limits of Talangpore, Taluka Choryasi, District Surat admeasuring 4816 square metres, the Gujarat Industrial Development Corporation (GIDC) executed a registered lease deed in his favour for a period of ninety nine years commencing from 5.4.1988 till 4.4.2087, which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fourth respondent, the petitioner company made a request to the second respondent for grant of NOC for change of Directors of the petitioner company in the record of the GIDC. However, since there was no response thereto, the petitioner personally met the officers of the respondents No.2 and 3 requesting for issuance of NOC. However, the petitioner was orally informed by the officers of the Central Excise Department that the NOC as prayed for cannot be granted since there are some dues outstanding of one M/s. Mahalaxmi Processors which was operating a unit of manufacture of textiles from the said plot as a 100% Export Oriented Unit (EOU) and since the demands raised under the Central Excise Act have not been cleared by the said M/s. Mahalaxmi Processors, an attachment notice dated 11.12.2013 has also been issued against the said manufacturer viz., M/s. Mahalaxmi Processors under the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 and that vide letter dated 20.5.2014, the Superintendent of Central Excise, Surat had requested the Regional Manager, GIDC not to change the ownership of the said premises in any other name unless a "No Objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that, therefore, on the date when the notice of attachment to the defaulter came to be issued on 11.12.2013, the property was already vested in the petitioner company and Shri Tehelram Thakordas Arora had no interest in the said property. It was submitted that in any case M/s. Mahalaxmi Processors had no interest in the said property and hence, GIDC cannot refuse to register the transfer. 4.2 Mr. Parikh drew the attention of the court to the provisions of section 11 of the Central Excise Act, 1944 (hereinafter referred to as "the Act") to point out that the respondents have no authority to resort to the provisions of section 11 of the Act qua the petitioner, inasmuch as, the petitioner has purchased the plot in question from Shri Tehelram Thakordas Arora and not from M/s. Mahalaxmi Processors. Besides, the proviso to section 11 of the Act envisages transfer of business of the trader either in whole or in part, whereas it is not the case of the respondents that the petitioner has purchased the business as a going concern from M/s Mahalaxmi Processors. It was submitted that under the circumstances, the liabilities of M/s. Mahalaxmi Processors cannot be foisted upon the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was invited to the lease deed dated 21.6.1999 executed by and between M/s. Amitex Silk Mills Limited and M/s. Mahalaxmi Processors to point out that M/s. Amitex Silk Mills Ltd. had given the subject premises on lease to M/s. Mahalaxmi Processors as per the terms and conditions recorded therein. Reference was made to the statement under section 302(2) of the Companies Act, 1956 (Annexure R-2 to the affidavit in reply of the respondent) to point out that Shri Tehelram Thakordas Arora was closely related to the Directors of M/s. Amitex Silk Mills Private Limited and was also one of the Directors. It was submitted that, therefore, the contention that M/s. Amitex Silk Mills Private Limited had no interest in the property in question is, therefore, without any basis. It was submitted that M/s. Mahalaxmi Processors carried on activities on the subject plot and did not comply with the export obligations and huge recoveries, as referred hereinabove, are due from it. It was submitted that the respondents are, therefore, justified in calling upon the GIDC not to grant permission to transfer the said plot on which M/s. Mahalaxmi Processors had carried on activities and GIDC has rightly not gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said demand, the Superintendent of Central Excise has informed the GIDC not to change the ownership of the said premises unless a "No Objection Certificate" is issued by the office. 9. As is evident from the facts noted hereinabove, the subject plot stood in the name of Shri Tehelram Thakordas Arora in whose favour GIDC had executed a lease for a period of ninety nine years. Shri Tehelram Thakordas Arora, in turn transferred the subject plot in favour of the petitioner way back in August, 2007. GIDC permitted such transfer in favour of the petitioner and accordingly, the plot stood transferred in favour of the petitioner and Shri Tehelram Thakordas Arora ceased to have any right, title or interest in the said property. Insofar as M/s. Mahalaxmi Processors is concerned, nothing has been brought on record by the respondents to establish that M/s. Mahalaxmi Processors had any right, title or interest in the plot in question. 10. Section 11 of the Central Excise Act, 1944 on the basis of which the respondents seek to enforce a condition for obtaining NOC from the Department prior to transfer of ownership of the subject plot provides for "Recovery of sums due to Government" and reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is due to such person, or may become due to such person, or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central Government either forthwith upon the money becoming due or being held, or at or within the time specified in the notice, not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount; (ii) every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary; (iii) in a case where the person to whom a notice under this sub-section has been issued, fails to make the payment in pursuance thereof to the Central Government, he shall be deemed to be a person from whom duty and any other sums of any ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject plot, even then the requirements of the proviso to sub-section (1) of section 11 of the Act are not satisfied. 12. Another notable aspect of the matter is that at the relevant time, when the dues of M/s. Mahalaxmi Processors had accrued, no action appears to have been taken in respect thereof. As held by this court in Valley Velvet Pvt. Ltd. v. Union of India (supra) when no time limit is prescribed for exercise of a power under a statute, it does not mean that it can be exercised at any time; such power has to be exercised within a reasonable time. From the statement produced by the respondents, it is evident that a charge is sought to be created on the subject plot in respect of the dues of the period 2003 to 2008 in the year 2013, after a considerable delay, which by no stretch of imagination can be said to be a reasonable time. Therefore, the impugned action of the respondents is also barred by limitation. Moreover, on a perusal of the notice dated 11.12.2013 it appears that a huge demand of Rs. 1,87,05,178/- has arisen on 25.2.2008, which is subsequent to the date of transfer of the subject plot in favour of the petitioner. It cannot be gainsaid that when the subject pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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