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TMI Blog2019 (9) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, 1961. It is true that there is no explicit provision made under the GVAT Act as is provided under the Second Schedule of the Income Tax Act, however, it is a well settled law that in the event of any 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 VERSUS GANGADHAR VISWANATH RANADE (DECD.) [ 1998 (9) TMI 1 - SUPREME COURT] and followed by this Court in the case of KARSANBHAI GANDABHAI PATEL SHOP NO. 7 3 VERSUS TAX RECOVERY OFFICER [ 2014 (4) TMI 411 - GUJARAT HIGH COURT] and therefore, there is no reason why the same would have no applicability in the instant case. This Court in the case of Karsanbhai Gandabhai Patel had an occasion to deal with section 281 of the Income Tax Act and relying on the judgement of the Apex Court in the case of Gangadhar Viswanath Ranade, struck down the order of attachment. Thus, it can be seen that even if the transactions creating a charge or parting of possession has been entered into by the assessee during the pendency of any proceedings under the Act or after completion thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the petitioner vide communication dated 21/7/2016 (Annexure-A collectively). 2.00. As per the case of the petitioner, the petitioner is owner of the aforesaid residential property in question from one Mr.Indravijaysinh Chauhan by way of a registered sale deed on 8/2/2016. The said residential property was originally belonged to Mrs.Bhavnaben Patel, who happens to be the mother of the petitioner. The mother of the petitioner sold the said bungalow by way of registered sale deed on 26/12/2014 to one Mr.Jayram Bharwad and Mr.Suresh Bharwad, who had in turn sold the property to the seller of the petitioner. As per the case of the petitioner, the petitioner purchased the said residential property after verifying the title of the property and after issuing public notice on 19/12/2015 in two local news papers. According to the petitioner one objection was received in response to the public notice, however, an amicable settlement had arrived at with the said objector Mr.Bhisambhai Jangiram Ramani. According to the petitioner, the petitioner thereafter has purchased the said residential property by way of registered saled deed dated 8/2/2016 at the consideration of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch charge. Thereafter, the petitioner pursue the matter with the respondent authorities by making communications dated 21/11/2016, 6/12/2016 and 20/6/2017. However, the respondent authorities neither responded the representations made by the petitioner nor have they withdrawn the charge and attachment on the residential property of the petitioner. Hence, this petition. 3.00. Mr.Uchit Sheth, learned counsel appearing for the petitioner has vehemently contended that the petitioner is bonafide purchase, who has purchased the residential proprty in question after making valuable sale consideration from his hard-earned money. He contended that he has purchaed the property by registered sale deed and his name is entered in the records of the society. He further contended that before purchase of the property, even he had given public notice in news papers and had also obtained Title Clearance Certificate from the Advocate and thus, after due verification and due case, he has purchased the property by way of registered sale deed. He further contended that on the date of the purchase of the property by way of registered sale deed, there was no charge over the property and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4.00. Present petition is opposed by Ms.Maithili Mehta, learned AGP appearing for the respondent Nos.1 and 2. She has vehemently contended that the charge has been crated towards the dues to the tune of ₹ 21,28,24,427/- for the A.Ys. 1987-1996, which has been accrued qua Swapnil Plastics and mother of the petitioner was one of the partners in the said Swapnil Plastics. It is contended that the property of the mother of the petitioner Bhavnaben Patel being one of the partners of Swapnil Plastic was attached on 6/3/2003. It is contended that the assessment orders were passed on 16/11/2002 and 5/12/2002 for the A.Ys.1987-1996. She further contended that for the A.Ys. 1987-88, 1988-89 and 1889-90, reassessments were carried out and reassessment orders were passed on 16/11/2002. She further contended that assessment orders dated 16/11/2002 5/12/2002 as well as reassessment order dated 16/11/2002 for the A.Ys. 1987-90 were challenged before the appellate authority, however, the same came to be disposed of due to non-payment of the pre-deposit. The said order of the appellate authority dismissing the appeal on the ground of non-payment of pre-deposit was challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention 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. Section 48 : Tax to be first charge on property. Notwithstanding anything to the contrary in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer, or as the case may be, such person. Thus, section 47 of the Act is concerned with a dealer who creates a charge on or parts with the possession by way of sale, mortgage, exchange or any other mode of transfer, after any tax becomes due from him, and when he so does in favour of any other person with the intention of defrauding the government revenue, this provision states that such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer. Section 48 of the Act creates first charge on the property of the dealer or any other person from whom tax is due. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realise the amount under this Schedule. 6. Purchasers title. (1) Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself be specified. (2) Where immovable property is sold in execution of a certificate, and such sale has become absolute, the purchasers right, title and interest shall be deemed to have vested in him from the time when the property is sold, and not from the time when the sale becomes absolute. 11. Investigation by Tax Recovery Officer. (1) Where any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection : Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed. ( 2) Where the property to which the claim or objection applies has been advertised for sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer for anything in good faith done or intended to be done under the Act. However, an exception is carved out under sub-rule (6) of rule 11 which permits institution of the suit in a civil court to establish the right by the party against whom an order is made in respect of the property in dispute and subject to the result of such suit, the order made by the Tax Recovery Officer shall be conclusive. There is of course no corresponding provision under the Gujarat Value Added Tax Act. 5.07. Submissions of Mr.Sheth, learned Advocate for the petitioner that because of explicit provisions made under Schedule II and in particular, sub-rule (6) of rule 11 of the Income Tax Act, the civil suit would be permissible and not otherwise, cannot be accepted. 5.08. It is true that there is no explicit provision made under the GVAT Act as is provided under the Second Schedule of the Income Tax Act, however, it is a well settled law that in the event of any 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration and without notice of pendency of such proceedings or without notice of such tax or other sum payable by the assessee or with the permission of the Assessing Officer. 5.09. Thus, it can be seen that even if the transactions creating a charge or parting of possession has been entered into by the assessee during the pendency of any proceedings under the Act or after completion thereof, the eventuality of such charge or transfer being declared void can be avoided provided one of the two conditions contained in the proviso is satisfied. Under such circumstances, the transferee can demonstrate that the transaction had taken place with the previous permission of the Assessing Officer or that the same was entered into for adequate consideration and without notice of pendency of such proceedings or without notice of such tax or other sum payable by the assessee. 5.10. This element of the transaction being with adequate consideration and without notice would equally apply to the assessee as well as the transferee. In a given case, it may even be open for the assessee to establish that the transaction was for adequate consideration without notice. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he TRO in declaring the transfer of property to be void was without jurisdiction. The Court also held that the impugned order attaches civil consequences. The authority therefore before passing such order ought to have given an opportunity to the petitioners of being heard. This was not done. This was an additional ground on which the order was struck down. 5.13. In the case of Sancheti Leasing Company Ltd v. Income Tax Officer, (2000) 246 ITR 814 (Mad) 190 , learned Single Judge of the Madras High Court following the decision of the Supreme Court in the case of Gangadhar Vishwanath Ranade, [1998] 234 ITR 188 (SC) held that ITO had no jurisdiction to declare the transaction of sale to the petitioners as void. 5.14. The aforesaid view is also taken by the Co-ordinate Bench of this Court in the case of Jayesh Vadilal Parikh Versus Commercial Tax Officer and others, reported in [2015] 78 VST 19 (Gujarat) . 5.15. The issue involved in the present petition is squarely covered by the decision of the Supreme Court in the case of Gangadhar Vishwanath Ranade (supra). 6.00. Applying the ratio of the aforesaid decisions we ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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