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TMI Blog2023 (8) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... when they were still in correspondence seeking details thereof. It was incumbent upon the Revenue Authorities in exercise of powers under Section 135 C of the Bombay Land Revenue Code to record the entries. There is no obligation, as rightly submitted by the learned counsel for the petitioner, to even apply for entering the names in the revenue records. When a registered document is produced, the authorities are bound to record the same in the revenue records. As held in the case of Jhaverbhai Savjibhai Patel [ 2005 (5) TMI 693 - GUJARAT HIGH COURT] when a registered document is produced the authority must prima-facie post an entry in the record of rights leaving it for the competent Court or Authorities to adjudicate on the dispute. In accordance with the provisions of the Bombay Land Revenue Code therefore once a registered document is produced before the revenue authority, he is bound to record a revenue entry based on such a document. The contention of the learned Assistant Government Pleader that in accordance with the provisions of Section 48 of the GVAT, 2003 the authorities are empowered to enter a charge as the sale could be a bogus one and a shield to overcom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Article 226 of the Constitution of India, the petitioner has made the following prayers: (A) YOUR LORDSHIPS may be pleased to admit and allow this petition; (B) YOUR LORDSHIPS may be pleased to issue a Writ of Mandamus or Writ in Nature of Mandamus or any other appropriate Writ, order or direction by quashing and setting aside the communication/order dtd. 03.08.2019 passed by the City Survey Superintendent, Rajkot (Annexure-A) in the interest of justice; (C) YOUR LORDSHIPS may be pleased to issue a Writ of Mandamus or Writ in Nature of Mandamus or any other appropriate Writ, order or direction by quashing and setting aside the two orders dated 17.06.2019 mutating Entry no. 8056 and Entry no. 8057 (Annexure-B1, Annexure-B2) passed by the Ld. City Survey Superintendent, Rajkot in the interest of justice; (D) YOUR LORDSHIPS may be pleased to issue a Writ of Mandamus or Writ in Nature of Mandamus or any other appropriate Writ, order or direction by directing the respondent Authorities to allow the application dtd. 13.03.2019 (Annexure-C) and further mutate the names of the petitioners in the City Survey records for land bearing survey Ward no. 14, City Surve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat Value Added Tax Act, 2003 (GVAT, 2003) committed by Eagle Motors Private Limited wherein the seller was one of the Directors. This order was passed by the City Survey Superintendent on account of order dated 11.06.2019 passed by the Tax Authority directing the Superintendent to register a charge on the properties of the Directors of Eagle Motors Private Ltd. 8. By a communication dated 03.08.3019 the objections raised by the petitioners recording a charge is rejected. 9. Mr.Anshin Desai learned Senior Advocate assisted by Ms.Venu Nanavaty for the petitioners made the following submissions: 9.1 The petitioners are admittedly not the defaulters of any VAT dues and are registered Sale deed owners with possession and the sale deed is not questioned before any civil court. 9.2 The petitioners have purchased the parcels of land from Manish Rasiklal Bavariya who is undisputedly the sole owner of the properties since 04.10.2006. 9.3 The authority is mandated under the Code to mutate names of registered sale deed owners, in this case though not obliged the petitioners have also applied since 13.03.2019 for mutation of their names 9.4 Instead of allowing the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply is the letter which is being referred to, even then the said letter nowhere instructs the City Survey Superintendent to create a charge, it only instructs to send the details of the properties belonging to the defaulters for further process of recovery. 9.9 It seems that on the basis of some communication dated 27.04.2018 oral instructions were given which cannot be believed because all these exercises began only after the present petitioner submitted an application for mutating his sale transaction in the revenue records. 9.10 It is submitted that the rejection of the application of the petitioner is based on a probable action to be taken in future on the basis of some instructions that charge has to be created (in future). The rejection is also based on some instruction received from the tax authorities wherein attachment and the proceedings were pending. It is not only shocking to note that such approach is being adopted to prejudice the rights of the petitioner but also surprising to see how all these aspects came to the light only after the application was made by the petitioner. Till that point, the authorities did not bother to take any steps with regard to any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of the petitioner, prior to the order of attachment and creation of a charge thereon. Therefore, as on the date when the subject property came to be attached and a charge came to be created thereon, it did not belong to the dealer. The provisions of section 48 of the GVAT Act, therefore, would clearly not be attracted in the facts of the present case. 9.14 In the present case, the initiation of proceedings under the Gujarat Value Added Tax Act, 2003 is beyond the limitation period provided under Section 34 of the said act whereby the authority has the power to initiate action within 4 years from the end of the year in respect of which or part of which the tax is assessable. 9.15 In the present case the proceedings have been initiated after more than 5 years from the default on the part of the earlier owners of the properties. Therefore, proceedings initiated after an unexplained and unreasonable delay which is beyond the mandatory period provided under the statute ought not to be permitted and deserve to be quashed and set aside in the interest of justice. 9.16 The law under the Bombay Land Revenue Code, 1879 (Section 135C) is settled that when a document of reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... touchstone of a statutory provision occurring in some other enactment. 9.19 In all cases of claims for mutation based on a registered document, the competent officer has to enter the name of the claimant- owner-right holder. The designated officer in charge of the said function has no jurisdiction to disregard the legal effect of the registered document, and he cannot be permitted to do so even indirectly. Once the petitioner purchased the land in question by virtue of registered sale deed, he is entitled to have his name mutated in the revenue records. 9.20 The recording charge in revenue records under section 135B and/or section 135C is without any basis because what is to be recorded under Chapter X-A of the Bombay Land Revenue Code is legal and valid claim which can be by way of mortgage but to record a charge in the record of rights or city survey records without there being any dues of the legal owner or legal occupier of the immovable property, no charge can be recorded. 9.21 That when an entry is to be mutated under Chapter X-A, it is not a clerical or an administrative function, there has to be application of mind and prima facie proof of recording what is submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irms, namely Eagle Motors Pvt Ltd, Eagle Auto Pearl Ltd and Eagle Auto Gems Pvt Ltd. In all these three firms the State had initiated assessment proceedings as well as recovery proceedings. 10.2 Mr. Trivedi would rely on Para 9 of the affidavit-in-reply which had the details of such proceedings. The details read as under: 9. I say and submit that in the case of Eagle Motor Pvt. Ltd. The authority had carried out assessment proceedings qua to below the assessment years: EAGLE MOTOR PVT. LTD. VAT NO. 24091802902 ASSESSMENT DETAIL YEAR OF ASSESSMENT ORDER PASSED DATE ON DEMAND RAISED REMARKS A/O SERVE DATE 2008-09 25.10.2012 160340 VAT 04.04.2013 2009-10 11.03.2014 67989 VAT 19.03.2014 2010-11 24.02.2015 1768754 VAT 31.03.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector. 10.8 He would submit that if one was to lift the corporate veil and see the intention of the seller it was obviously done with a view to defraud and alienate property so as to avoid tax payments and attachment and the transaction of sale in such cases had to be presumed to be a sham and a bogus transaction. 11. Having considered the submissions made on behalf of the respective parties it would be apt to set out the chronology of dates as set out in the Written Submissions filed by and on behalf of the petitioners, so as to avoid duplicity and overlapping. CHRONOLOGY OF DATES SR.No. DATE PARTICULARS 1 -- The present dispute pertains to land bearing Survey Ward no.14, City Survey no. 465 an no. 469 admeasuring 483-39 sq. mtrs including the construction on area admeasuring 34-04 sq. mtrs. situated at Bhilvaas, Rajkot 2 06.05.2005 01.05.2006 The property in question was bequeathed to the seller Mr. Manishkumar Rasiklal Bavariya by his father Rasiklal Damjibhai Bavariya (Director of Eagle M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.05.2018 The Tax Authority initiated recovery proceedings qua Eagle Auto Pearl Pvt. Ltd. For assessment year 2013-2014. 11 28.08.2018 The Joint Commissioner of Commercial Tax wrote a letter to the City Survey Superintendent, Rajkot by which a reminder has been made and the process to find out the property details of Eagle Auto Pearl Pvt. Ltd. 12 26.02.2019 That the petitioners purchased the land in question vide registered sale deed dtd. 26.02.2019 from Manishkumar Rasiklal Bavariya. 13 26.02.2019 All the liabilities on the property in question were cleared by the petitioners prior to the execution of the sale deed and hence, the Central Bank of India, Jaganath Plot Branch, Rajkot also issued a No-Due Certificate dtd. 26.02.2019 for the same and a registered Reconveyance Deed dtd. 26.02.2019 was also executed by the Bank. 14 13.03.2019 The petitioners filed and application praying for mutation of their names for lands bearing Ward no.14, City Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.1 What emerges from such chronology is that the property in question was of the personal ownership of the Director which he had procured by virtue of a Will. It was a bequeathment by the father Rasiklal Bavariya in favour of his son Manish Bavariya and the Letters of Administration too were obtained from the Civil Court. Therefore the property was a solely owned personal property of the Director/Seller. 11.2 The details of assessment proceedings as set out in the reply and which we have reproduced herein above would indicate that they range for years from 2009-2014. Even what was the subject matter of attachment already undertaken by the Tax Authorities was the showroom and workshop of Eagle Motors Private Limited as far as on 9.1.2015. 11.3 It is also apparent that right from 2015 there was an exchange of correspondence between the Tax Authorities and the Revenue Authorities seeking details of the properties belonging to such Directors and there were no attachment proceedings which came to be passed for the property in question. The Tax authorities were still making a roving inquiry as to the details of the properties which in turn the revenue authorities c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate on the dispute. 11.10 Paras 6 to 8 of the decision in the case of Jhaverbhai Savjibhai Patel (supra) read as under: 6. As such the issue involved in this petition is covered by the decision of this Court in case of Jayantilal Jethalal Soni v. State of Gujarat dated 28.9.2004 passed in Special Civil Application No. 12547/2004. The relevant observations made by this Court in the aforesaid decision at paragraphs 7, 8, and 9 are as under: 7. It appears that if a registered sale deed is executed by the holder of the land, it confers the right pertaining to the land in question in favour of the purchaser of the land and, therefore, the rights pertaining to the land in question in normal circumstances can be said to have been acquired over the land in question for which recording is required to be made in the revenue record. It is also well settled that the revenue entries are having value only for fiscal purpose and more particularly for the purpose of recovery of revenue and it neither confers any right or title over the property, nor does it take away the right or title in the property which otherwise cannot be available under the law. However, the question whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed and if the revenue authority prima facie is of the view that such transfer is either barred under the other enactment or is resulting into a breach of other enactment or is to result into adversely affecting the rights under the other enactment and consequently sale is prohibited, then in that case, the appropriate course for the revenue authority would be to record the entry for registered sale deed with the express observations that the registered sale deed is prima facie in breach of the other enactment and simultaneously refer the matter to the competent authority under the other concerned enactment of which breach is committed and the entry should be made subject to the final decision which may be taken by the competent authority under the other concerned enactment. This Court is inclined to take such view, because the one, who may be a bonafide purchaser or one who is interested to purchase the property would normally rely upon the revenue entry for enquiring into the title and the possession of the property. If the entry is certified on the basis of registered sale deed as it is, without recording for aforesaid qualification or clarification, the resultant effect would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was under challenge by preferring civil suit. This Court by relying upon the earlier decision in case of Jayantilal Jethalal Soni v. State of Gujarat (supra), in Special Civil Application No. 14037/2004 dated 24.12.2004 in case of Hasmukhbhai Kasturchand Shah v. Heirs of Dahiben Wd/o Shanabhai Bhulabhai Hirabhai has further made observations at paragraphs 4 and 5 as under: 4. Therefore, so far as the entries which are based on registered sale deed are concerned, the same cannot be cancelled in toto and it deserves to be restored in the revenue record with the clarification that they shall be subject to the outcome of the proceedings under Section 84C of the Tenancy Act which as per the contention of Mr. Barot are pending before the Revenue Tribunal. So far as entry No.1900 dated 26.2.1972 is concerned, the same was not directly the subject matte of the proceedings under Section 84C of the Tenancy Act which were initiated in respect to three registered sale deeds on the basis of which entries No. 2067, 2068 and 2248 were mutated in the revenue record. It appears that after entry No. 1900 dated 26.2.1972 the very land is sold by registered sale deed by deceased Dahibe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty/ies in respect of which entry/ies is/are ordered to be restored by resorting to appropriate proceedings in the Civil Court, either in the pending Suit or by substantive suit as may be permissible in law. 8. In my view, the same situation would prevailin view of the aforesaid decision of this Court and as a consequence thereof, the orders passed by the Revenue Authorities for cancelling the entry No. 8569 in toto deserves to be quashed and set aside with the direction that the entry No.8569 shall continue to remain in revenue record with the qualification and clarification that the same shall be subject to the outcome of the proceedings of Civil Suit No. 497/2002. 9. So far as Special Civil Application No. 8559 of 2005 is concerned, the same will be the situation, except that there will be change in the number of entry being Entry No. 8570 and, therefore, the entry No. 8570 shall continue to remain in revenue record with the qualification and clarification that the same shall be subject to the outcome of the proceedings of Civil Suit No. 497/2002. 10. Both the petitions are partly allowed to the aforesaid extent. Rule made absolute accordingly. Considering the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assets in favour of any other person with the intention to defraud the revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding; Provided that such charge or transfer shall not be void if made for valuable consideration and without notice of the pendency of the proceeding under this Act. 8. Section 281 declares as void any transfer made by the assessee during the pendency of proceedings under the Act, with the intention to defraud the Revenue. The powers of the Tax Recovery Officer, however, under Rule 11 of the Second Schedule to the Income-tax Act are somewhat different. Under Rule 11(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. Under Rule 11(4), (5) and (6) it is provided as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring that the transaction is void under Section 281 of the Income-tax Act. In the earlier proceedings, however, although the High Court has not set aside this order of the Income Tax Officer, the High Court has expressly held that the order amounted only to an intention of declaration on the part of the Department to treat the transaction as void under Section 281. Such a declaration cannot affect the legal rights of the parties affected under Rule 11. The High Court expressly held that the rights of the parties under Rule 11 were not affected in any way by this declaration. The Department, therefore, cannot proceed on the assumption that the transaction is void under Section 281, nor can the Tax Recovery Officer, while proceeding under Rule 11, declare a transaction of transfer as void under Section 281 by relying on the Order of 9.5.1974 or otherwise. His jurisdiction relates to examining possession, and only incidentally, any question of right to possession as claimed by the Objector. The High Court has, therefore, rightly set aside the order of the Tax Recovery Officer. 14. However, the right of the Department to have the transfer declared as void under Section 281 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court even if the case of the department is that the transfer is with the intention of defrauding the Government Revenue the only remedy for the Government is to file a Civil Suit. 11.15 That brings us to the question whether at all the personal properties of a Director of a Private Limited Company can be attached or a charge be created under the provisions of the GVAT, 2003. 11.16 Mr. Desai Learned Senior Advocate, in support of his submission that the personal properties of the Director cannot be attached or a charge be created, has relied on several decisions of this Court. 11.17 In the case of Nipun A Bhagat (supra) a Division Bench of this Court in context of the submission that the GVAT, 2003 in absence of any provisions does not empower the respondents to recover any of the liabilities from its Directors held thus: 15. 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 respondent No. 2 could have exercised power under Rule 86A of the Rules, 2017 for the purpose of blocking the input tax credit available in the credit ledger account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and considering the material on record, it appears that it is not the case of the State that the property in question at any point of time belonged to the company nor is it the case that. The only question that arises for determination in this petition under Article 226 of the Constitution of India is whether for the purpose of recovery of sales tax dues under The Gujarat Value Added Tax Act and Gujarat Sales Tax Act against Gujarat against a private limited company, the personal property belonging to the Managing Director of such company can be attached. 8.1. The Co-ordinate Bench while considering the similar issue, relying upon the decision of Division Bench of this Court rendered in Special Civil Application No. 243 of 1991 with Special Civil Application No. 3103 of 1991 and Special Civil Application No.7578 of 1991 in the case of Mr.Choksi Vs. State of Gujarat, has allowed the said petition and quashed and set aside the impugned notification by holding that the auction of the residential property in question as illegal and bad in law and restrained the respondents from attaching or selling any private property of the Managing Director of the Company for realization o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of the Director in the facts of this case when related to the personal property of the Director cannot be a matter of attachment or creation of a charge as is sought to be done in the facts of the present case. 11.21 In the case of C.V. Cherian (supra) the Court in Paras 1 to 4 held as under: 1. The only question that arises for determination in this writ-application under Article 226 of the Constitution of India is whether for the purpose of recovery of sales tax dues under The Gujarat Value Added Tax Act and Gujarat Sales Tax Act against a private limited company, the personal property belonging to the Managing Director of such company can be attached and sold for realisation of the dues against the company. 2. After hearing the learned counsel appearing for the parties and after going through the affidavit filed by the State respondent, it appears that it is not the case of the State that the property in question at any point of time belonged to the company nor is it the case that the Managing Director is holding property as 'benamdar'. In that view of the matter, we find substance in the contention of the learned counsel Mr.Kazi appearing on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had no means of knowing about the dues and that the petitioners are bona fide purchasers for consideration. 7.1 It was submitted that in any case, the dues of the erstwhile owners have arisen after the subject property was purchased by the petitioners and hence, it is not permissible for the respondents to attach the subject property and create any charge over it. It was pointed out that the respondents have placed reliance upon section 47 of the GVAT Act to contend that the transfer is a fraudulent transfer, to submit that if that be so, the respondents are required to approach the civil court to get the transfer set aside, if the transfer is void. However, they cannot seek to recover the dues of the erstwhile owner of the subject property, from the petitioners. It was, accordingly, urged that the petition deserves to be allowed by granting the reliefs noted hereinabove. 8. Opposing the petition, learned Assistant Government Pleader Ms. Maithili Mehta, placed reliance on the averments made in the affidavit-in-reply filed on behalf of the respondent No.2, wherein it has been stated that the dues of Varun Filaments Private Limited, namely the erstwhile owner, are to the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a specific intention at the end of Varun Filaments Private Limited to defraud the Government. It was, accordingly, urged that there being no infirmity in the action taken by the respondent authority, there is no warrant for interference by this court and that the petition being devoid of merits, deserves to be dismissed. 11.23 Since the case of Choksi (supra) appears to be the leading judgement which has been followed in the subsequent decisions apt it should be to consider the relevant paras of the said decision which read as under: 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 Sales tax Officer at Godhra that the appeal filed by Choksi Plastics Pvt. Ltd. was being dismissed on account of noncompliance with the order for deposit of the sales-tax dues of the said Company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al liability of the Directors without providing for any personal liability of the Directors or their personal properties for payment of sales-tax dues of the Company in question, the provisions of Section 78 lend support to the case of the petitioners rather than the case of the authorities. 13. As regards 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, when it comes to recovering the dues from the company towards liability incurred under the Act, the Department cannot proceed against the individual Director of the Company. It is not in dispute that the bank account is the personal account of the Director. 4. In view of the aforesaid, this writ-application succeeds and is hereby allowed. The attachment so far as the Current Account bearing No. 0372102000022385 maintained with IDBI Bank, Durga Das Nagar, Pali, Rajasthan stands hereby lifted. 11.26 Paras 8 to 10 Nehal A Shah (supra) read as under: 8 Mr. Sharma, the learned A.G.P. appearing for the State, with his usual fairness, submits that the issue is no longer res integra in view of two orders passed by this Court in the case of : (i) Paras Shantilal Savla vs. State of Gujarat [Special Civil Application No. 7801 of 2019 decided on 27th June 2019] and (ii) Sunita Ramesh Bansal vs. Assistant Commissioner of State Tax [Special Civil Application No. 229 of 2022 decided on 13th January 2022]. We quote the relevant observations made by this Court as contained in para 6 of the order passed in the case of Paras Shantilal Savla (supra) as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 subsection, no interest shall be payable under this subsection 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 subsection (4A) of Section 47 of the Act, our attention is invited to the decision of another Division Bench of this Court in Ashapura Mineral Company vs. State of Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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 purposes. Hence, the Legislature was justified in treating the State Government as a separate class and providing for a higher rate of interest on the dues of the Government of the State. 7. In view of the aforesaid pronouncement of this Court, the prayers challenging the constitutional validi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 noncompliance 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 Sales-tax Officer, Godhra and the Recovery Officer proceeded against the personal properties of the Directors of Choksi Plastic Pvt. Ltd.. Similarly, in Special Civil Application No. 7578 of 1991 nothing is brought to our notice to indicate that the concerned authority had taken any conscio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined. 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 that the respondents are restrained from proceeding against the petitioners or their personal properties for recovery of the sales-tax dues of the respective Companies in which they are Directors. Rule is made absolute to the aforesaid extent only in the said two petitions. There shall be no order as to costs. 9 Thus, unlike Section 179 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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