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TMI Blog2019 (8) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of tax, penalty or interest due and payable by the respondent No.3. It is not the case of the department that the writ applicant has defaulted, in any manner, with regard to payment of the tax under the Act, 2003. The argument of the learned AGP that the writ applicant would fall within the ambit of the words other person as figuring in Section 46 of the Act, 2003 deserves to be outright rejected. In the case of State of Gujarat vs. Jwelly Tea Co. [2016 (2) TMI 94 - GUJARAT HIGH COURT] it was held that The legislature having treated a Hindu Undivided Family as a taxable entity, distinct from the individual members constituting it, it was not open for the appellant to attach the movable properties of an individual member - the Tribunal was wholly justified in holding that the property of the individual member of the Hindu Undivided Family could not be attached under section 45 of the GVAT Act. One aspect which needs to be clarified is that only the land belongs to the writ applicant. The writ applicant is neither dealer nor the agent but he is father of the dealer. The property which has been attached is self acquired property of the writ applicant. Therefore, the land of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dealer was not present at the registered premises as he was on foreign tour for the business purpose but the petitioner who is father of the dealer was present. 2.04. Thereafter provisional assessment order was passed on 31/3/2015 for the years, 2011-12, 2012-13, 2013-14 and 2014- 15. calculating VAT liability plus penalties and interest to the tune of ₹ 57,51,985/-, ₹ 44,91,558/-, ₹ 36,02,789/- and ₹ 16,76,645/- respectively. 2.05. Thereafter, notice was issued on 12/3/2015 to the dealer under section 34(2) of the Act calling upon the dealer to scrutinize the genuineness of the annual reports for the period ranging from 1/54/2012 to 31/3/2013. Additionally, on the same date, notice under the provisions of the Central Sales Tax rules also came to be issued replicating the contents of the notice issued under the provisions of the Act. 2.06. Thereafter, the Mamlatdar, Kadi issued notice on 3/8/2015 pursuant to the order passed by the respondent No.1 directing to attach the property of the petitioner. By way of the said notice dated 3/8/2015, charge has been created by the Mamlatdar, Kadi on the self-acquired p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that the petitioner is not the dealer as per subsection (2) of section 10 of the Act and is not the owner of the residential premises and factory. 5.00. CONCLUSION : 5.01. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the self-acquired property of the ownership of the writ applicant who is neither dealer nor agent, could have been attached for the purpose of recovering the dues payable by the respondent No.3 under the Act, 2003. 6.00. Before adverting to the rival submissions canvassed on either side, we must look into few relevant provisions of the Act, 2003. 6.01. Clause 2(10) of the Act, 2003 defines the word dealer . The same reads as follows:- dealer means any person who, for the purpose of or consequential to his engagement in or, in connection with or incidental to or in the course of his business buys, sells, manufactures, makes supplies or distributes goods, directly or otherwise, whether for cash or deferred payment, or for commission, remuneration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act. ( ii) The Central Government or a State Government or a local authority or railway administration or port trusts or a statutory body, which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act. ( iii) Any person or body, which disposes of any goods including unclaimed, confiscated, unserviceable, scrap, surplus, old, obsolete, discarded, waste or surplus product or goods, whether by auction or otherwise, directly or through an agent, for cash deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act. Exceptions .-- The following shall not be deemed to be a dealer within the meaning of this clause, namely:- ( I) an agriculturist who sells exclusively a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by theCommissioner under that sub-section, the dealer or the person shall be deemed to be in default in respect of the whole of the amount then outstanding and the other installments shall be deemed to have been due on the same date as the installment in default. ( 4) Interest at the rate of eighteen per cent per annum shall be charged for the period as may be extended or the installments as may be granted under sub-section (2). ( 5) If the amount of tax and penalty, if any, is not paid within the time specified in sub-section (1) or extended under sub-section (2), as the case may be, the dealer or the person liable therefor shall be deemed to be in default in respect of that amount. ( 6) Where the amount of tax assessed or reassessed for any period, under section 34 or section 35, subject to revision, if any, under section 75, exceeds the amount of tax already paid by a dealer for that period, there shall be paid by such dealer, for the period commencing from the date of expiry of the time prescribed for payment of tax under sub-section (1), (2) or (3) of section 30 and ending on date of order of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter deducting therefrom such claims, if any, lawfully subsisting, as may have fallen due for payment by such dealer to such person. ( 2) The Commissioner may amend or revoke any such notice or extend the time for making any payment in pursuance of the notice. ( 3) Any person making any payment in compliance with a notice under this section shall be deemed to have made the payment under the authority of the dealer, and the receipt thereof by the Commissioner shall constitute a good and sufficient discharge of the liability of such person to the extent of the amount specified in the receipt. ( 4) Any person discharging any liability to the dealer after receipt of the notice referred to in this section, shall be personally liable to the Commissioner to the extent of the liability discharged or to the extent of the liability of the dealer for tax, penalty and interest, whichever is less. ( 5) Where a person to whom a notice under this section is sent objects to it by a statement in writing that the sum demanded or any part thereof is not due or payable to the dealer or that he does not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perform all the duties of the Assistant Collector or Deputy Collector under the said Code. ( iii) the Commercial Tax Officers shall have and exercise all the powers (except the powers of arrest and confinement of a defaulter in a civil jail) and perform all the duties of the Mamlatdar under the said Code. ( 2) Every order passed in exercise of the powers conferred by subsection (1) shall, for the purpose of section 73, 75, 78, 79 or 94, be deemed to be an order passed under this Act. 6.07. Section 47 declares any transfer with the intent to defraud the revenue as void; 47. Transfer to defraud revenue void:- Where a dealer after any tax has become due from him creates a charge on or parts with the possession by way of sale, mortgage, exchange or any other mode of transfer whatsoever of any of his property in favour of any other person with the intention of defrauding the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer. 6.08. Section 48 clarifies that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est due and payable by the respondent No.3. It is not the case of the department that the writ applicant has defaulted, in any manner, with regard to payment of the tax under the Act, 2003. The argument of the learned AGP that the writ applicant would fall within the ambit of the words other person as figuring in Section 46 of the Act, 2003 deserves to be outright rejected. In what manner, the words other person figuring in section 46 should be understood, shall be explained by us a little later. The petitioner herein is the father of the dealer and the property attached is self-acquired property of the petitioner. The law is amply clear. The entire approach of the State Authorities in this regard is incorrect and not sustainable in law. 6.12. The writ applicant is the lawful owner of the attached land and the writ applicant is neither dealer nor the agent. The relationship is just of a lessor and lessee. The land, as on date, belongs to the writ applicant-Company. 6.13. In the case of S tate of Gujarat vs. Jwelly Tea Co., reported in (2016) 90 VST 501 (Gujarat) , a Coordinate Bench of this Court had observed as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evious year of every person and person is defined in Section 2 (31) as including- (I) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. The Legislature having treated a Hindu undivided family as a taxable entity distinct from the individual members constituting it, and proceedings for assessment and recovery tax having been taken against the Hindu undivided family, it was not open to the Tax Recovery Officer to initiate proceeding against the manager of the Hindu undivided family for his arrest and detention. It is true that if properties of the family, movable and immovable, are to be attached proceedings may be started against the Hindu undivided family and the manager represents the family in proceedings before the Tax Recovery Officer. But by the clearest implication of the statute the assessee alone may be deemed to be in default for non-payment of tax, and liability to arrest and detention on failure to pay the tax due is also incurred by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or contract to the contrary, the Commissioner may, at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the dealer at his last known address, require,-- ( a) any person from whom any amount of monies is due, or may become due, to a dealer on whom notice has been served under sub-section (1), or ( b) any person who holds or may subsequently hold monies for or on account of such dealer, to pay to the Commissioner, either forthwith upon the monies becoming due or being held or within the time specified in the notice (but not before the monies becomes due or is held as aforesaid) so much of the monies as is sufficient to pay the amount due by the dealer in respect of the arrears of tax, penalty or interest under this Act, or the whole of the money when it is equal to or less than that amount. Explanation .-- For the purposes of this sub-section, the amount of monies due to a dealer from, or monies held for or on account of a dealer by any person, shall be calculated by the Commissioner after deducting therefrom such claims, if any, lawfully subsisting, as may h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aler nor the agent but he is father of the dealer. The property which has been attached is self acquired property of the writ applicant. Therefore, the land of the ownership of the writ applicant could not have been attached. 7.06. In the same manner, upon such attachment, there could not have been any charge created in favour of the State Government and a revenue entry could not have been mutated in that regard in the record of rights. 8.00. In the result, this writ application succeeds and is hereby allowed. The impugned orders passed by the Assistant Commissioner of Commercial Tax, Unjha dated 14/07/2015 as well as the impugned order passed by the Mamlatdar, Kadi dated 03/08/2015, against the interest of the petitioner, with respect to mutation of the entry in the revenue records of the self acquired property of the petitioner who is neither owner nor agent, is hereby quashed and set aside. The endorsement made in the revenue records of the attached property is ordered to be removed forthwith and there shall not be any charge or encumbrance or attachment on the property in question. The respondents are at liberty to proceed further for recovery of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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