9911796707
TMI Blog2019 (7) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... : UCHIT N SHETH (7336) For The Respondent (s) : MS MAITHILI MEHTA, AGP (1) ORAL ORDER ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. Rule returnable forthwith. Ms. Maithili Mehta, the learned AGP waives service of notice of rule for and on behalf of the respondents. 2. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs: A. This Hon ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ or order directing the learned Respondent authorities to forthwith comply with the order of the learned first appellate authority (annexed at Annexure D) and withdraw/delete the attachment entered in revenue records on property located at Survey No. 968 (Old Survey No. 1310/1), Manij, Taluka Mahemdabad, District Kheda; B. Pending notice, admission and final hearing of this petition, this Hon ble Court may be pleased to direct the learned Respondent authorities to forthwith comply with the order of the learned first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The learned first appellate authority was pleased to allow the appeal so filed by the Petitioner along with the company and the attachment order was quashed and set aside on the ground that property of the lessor could not be attached under the Sales Tax Act for dues of the company. 8. Despite the fact that the learned first appellate authority have quashed and set aside the attachment of property, the learned Respondent authorities are not withdrawing/deleting the attachment from the revenue records. 9. In the meantime the Petitioner along with other co-owners had filed civil suit against the Sales Tax department regarding the attachment of personal property of the Petitioner and other coowners for alleged dues of the company. The civil court by judgement dated 31.3.2014 while holding that personal property of the Petitioner could not be attached for dues of the company, refused to decree the suit on the ground that it did not have jurisdiction to do so because of Section 94 of the Sales Tax Act. 10. The Petitioner has been repeatedly requesting for implementation of order of the learned first appellate aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Tax, Appeal-3, Gandhinagar dated 13.06.2006 which reads thus: ANNEXURE D Taken into consideration: ( 1) Registration File of M/s Yash Organics Ltd., Mu. Mahij, Ta. Mahemadabad, Registration Number 21804398 ( 2) Order dated 17/11/05 bearing number Nakga/Appeal- 3/05-06/Ja. 2714/16 (3) Memo of Appeal dated 17/1/2006 Heard: Shree M.N. Vyas, Sales Tax Consultant and Bharatbhai Suthar, Accountant Sr. No. Nakaga/Appeal-3/2006-07/Ja. 639/82 Office of Deputy Commissioner of Commercial Tax Appeal-3, Kuber Bhavan, 5th Floor, Sector 10, Behind Krushnabhavan, Gandhinagar Date: 14/6/2006 Order ( Under Section 65 of the Gujarat Sales Tax Act, 1969) In respect of appeal in relation to (1) above Shree M.N. Vyas, Sales Tax Consultant, has remained present. The appellant has on 7/01/2002 filed an appeal in time against order dated 27/11/01 attaching its property passed by the Sales Tax Officer (3) Division -1 Nadiad. The appellant has rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal-3, Gandhinagar Copy to: ( 1) M/s Yash Organics Ltd. Mu. Mahij, Ta. Mahemdabad ( 2) For information of Commercial Tax Officer (3), Ghatak-1, Nadiad ( 3) For information of Commercial Tax Officer (1), Ghatak-4, Vadodara Copy with complements to: For information to Joint Commissioner of Commercial Tax, Appeal-1, Ahmedabad True Copy Deputy Commissioner of Commercial Tax Appeal-3, Gandhinagar 5. The facts in this case are not in dispute. The short controversy in this matter is whether personal property belonging to the Director of a company can be attached and sold for the realisation of the dues from the company under the Gujarat Value Added Tax Act, 2003. The issue is no longer res integra in view of the decision in the case of CHOKSI V. STATE OF GUJARAT (Special Civil Application Nos. 243, 3103 and 7578 of 1991 decided on June 17, 2004). 6. We may quote the relevant observations rendered in Special Civil Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the time prescribed for its payment under subsection (1), (2) or (3) or on or before the date specified in a notice issued under sub-section (4) in respect of the amount of tax falling under sub-clause (ii) of clause (a) thereof, there shall be paid by such dealer for the period commencing on the date of expiry of the aforesaid prescribed time or the specified 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 subsection (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, S.6, the rate of interest is reduced from 24 per cent to 18 per cent w.e.f. 1.9.2001. 6. 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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiry. Provision for payment of interest being a method of collecting or recovering revenue, it is for the State to decide what is most efficacious for this purpose, and the defaulter has no moral right to make any grievance in this behalf. If the rate of interest fixed for non-payment of tax within time is not unreasonably high, then it cannot be said to be arbitrary or unreasonable. The Court also considered the contention that the State which had to refund the amount 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 HCNIC Page 4 of 8 Created On Fri Jun 28 12:52:40 IST 2019 purposes. Hence, the Legislature was justified in treating the State Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even if the Company and its Directors are separate legal entities, it is open to the authorities to lift the corporate veil and to proceed against the personal properties of the Company. 10. Before dealing with the rival submissions, we would like to point out that in neither of the two petitions i.e. Special Civil Application No.243 of 1991 and 7578 of 1991, the authorities have passed any specific order fastening the liability on the Directors for payment of sales-tax dues of the respective Companies. For instance, in the letter dated 31.8.1989, the Assistant Sales-tax Commissioner (Appeals) Baroda has informed the concerned Salestax 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 Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the faint plea of lifting the corporate veil, as per the settled legal position, the corporate veil is not to be lifted lightly. It is only when there is strong factual foundation for lifting the corporate veil that the question of examining the applicability of the principle of lifting such veil would be required to be examined. In neither of the two petitions raising the controversy, the authorities have passed any specific order fastening the liability on the Directors personally, much less any factual foundation has been laid to invoke the doctrine of lifting the corporate veil. Hence it is not necessary to dilate on the said principle any further. 14. In view of the above discussion, Special Civil Application No.3103 of 1991 is rejected since the constitutional validity of sub-section (4A) of Section 47 of the Gujarat Sales-tax Act, 1969 is already upheld in the case of Ashapura Mineral Company vs. State of Gujarat Ors., (1993) 89 STC 289. Rule is discharged. Similar prayer made in Special Civil Application No.243 of 1991 is also rejected. 15. However, Special Civil Application No.243 of 1991 and 7578 of 1991 are allowed to the extent th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
