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TMI Blog2018 (2) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... e . Thus, the transfer of property can be declared void provided there is intention to defraud the government revenue. The Act does not lay down any mechanism to declare the transfer as void. In our considered opinion, the only remedy available to the respondent authorities is to approach the Civil Court for a declaration to treat the transfer as void by adducing evidence of an intention to defraud . In the present case no tax was due on the petitioner and no charge is created on the property in question in respect of the alleged dues of the erstwhile owner which is an essential requirement of the section. Hence, the applicability of the provisions of section 47 in the case of the petitioner itself is an argumentative issue. In such circumstances, the only recourse available for the VAT authorities is to approach the Civil Court to annul the transfer on the ground that it was made with an intention to defraud the government. A conspectus of the aforenoted sections of the Act, will postulate that the authorities are not conferred with any powers to issue any communication/notice to the Society instructing it not to issue a No due certificate in relation to the property. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led appropriate applications as required under the byelaws of the cooperative housing society for the purpose of transfer of name in the share certificate of the society. Transfer fees had also been duly paid to the society with respect to the flat in question. While the Petitioner had already taken possession of the flat on the basis of the registered sale deed and she was about to initiate the process of making renovations in the flat, she was informed by the Chairman of the society that the impugned notice had been received from Commercial Tax Officer of the State of Gujarat on 25.7.2016 regarding outstanding tax dues of a partnership firm M/s Apurva Aluminium Corporation in which the erstwhile owners and sellers of the flat were allegedly partners and hence the Chairman had been instructed not to transfer the said flat in any other name or issue a noobjection certificate in respect of the property. 5. The petitioner immediately contacted the Sellers of the flat to inquire about the issue. The sellers informed the Petitioner that they were never partners in the partnership firm Apurva Aluminium Corporation . It was their son Daxesh who was a partner but he did not have any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng was initiated by the VAT authorities. It was also contended that in case, the VAT authorities intended to stake any claim over the property for the alleged VAT dues then the only recourse available to them was to approach the Civil court. To strengthen his contention, he has placed reliance on the judgments in the case of Jayesh Vadilal Parekh Vs. Commercial Tax Officer, reported in (2015) 78 VST 19(Gujarat) and Tax Recovery Officer Vs. Gangadhar Vishwanath Ranade (Decd), reported in (1998) 234 LTR 188 (SC). He has also placed reliance on the judgment in the case of The Ahmedabad Municipal Corporation of the City of Ahmedabad Vs. Haji Abdul Gafur Haji Hussenbhai, reported in AIR 1971 SC 1201 for the proposition of law that the petitioner cannot be fixed with any constructive notice for the arrears of VAT authorities. In view of the aforesaid submissions, he urged that impugned letter dated 22.07.2016 may be quashed and set aside. 8. A fortiori, Mr.Chintan Dave, learned AGP for the respondent authorities has submitted that the recovery proceedings for the arrears of VAT were initiated against the owner i.e. Sureshchandra N. Shah and his wife Dharmishtaben S. Shah and the reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner and the sellers. c. No charge is created on the property in question by the Respondent authorities. 12. Now adverting to the case before us, we notice that the affidavit filed by the respondent no.2 would suggest that the VAT dues to the tune of ₹ 7,61,94,462/have accrued for the period between the Years 1995 and 2007. The respondent authorities thus, have issued the impugned notice with respect to the aforesaid properties in the Year 2016, whereas the demand was pending since the Year 1995. The respondent authorities did not respond to the public notice given by the petitioner on 01.12.2016 in two newspapers and only after the saledeed was registered they informed the respondent no.3 Society not to issue an No Objection Certificate regarding property in question. Thus, it is axiomatic that the respondent authorities are negligent in not raising any objection or providing any information of any dues in response to the notice of the petitioner though the dues had accrued since 1995. The respondentauthority has not produced any documents indicating that any steps were taken by them qua recovering the dues prior to 2016. The Supreme Court in the case of The Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes which were a charge on the property and which were also given priority under Section 61 of the Provincial Insolvency Act. 1920, had been duly paid by the receivers out of the rental income. The plaintiff could have no reasonable ground for assuming that they were in arrears. From the plaintiffs testimony it is clear that he did nevertheless make enquiries from the receivers if there were any dues against the property though the enquiry was not made specifically about Municipal dues. Apparently he was not informed about the arrears of Municipal taxes. This seems to us explainable on the ground that the receivers had, after securing appropriate orders, for some reason not clear on the record, omitted to pay the arrears of Municipal taxes and they were, therefore, reluctant to disclose this lapse on their part. On these facts and circumstances we do not think that the plaintiff could reasonably be fixed with any constructive notice of the arrears of Municipal taxes since 1949 . 13. In the present case it is evident that the petitioner had issued public notices dt.1.2.2016 in two newspapers inviting any claim on the property. The respondent authorities did not respond to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny dispute in relation to the title of any property, it is the civil court which shall have a jurisdiction. This has also been emphatically held and observed by the Apex Court in Tax Recovery Officer v. Gangadhar Viswanath Ranade (Decd) 234ITR 188(SC) .. 16. Unquestionably, in the present case no tax was due on the petitioner and no charge is created on the property in question in respect of the alleged dues of the erstwhile owner which is an essential requirement of the section. Hence, the applicability of the provisions of section 47 in the case of the petitioner itself is an argumentative issue. In such circumstances, the only recourse available for the VAT authorities is to approach the Civil Court to annul the transfer on the ground that it was made with an intention to defraud the government. 17. There is yet another issue which has been perceived by us and the same necessitates observations. The Respondent no.2 authority vide impugned notice/communication dt.22.7.2016 has instructed respondent no.3 Society instructing it not to issue No objection Certificate to the petitioner. The genesis of section 47 lies in section 44 which envisages special mode of recovery to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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