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2022 (11) TMI 1435 - HC - VAT and Sales TaxAlleged changes in management in the petitioner Company from 1.4.2017 to 31.3.2022 without notice to the Collector of Excise - whether appointments, resignation, expiry of term and death of directors would amount to “change in management” under the West Bengal Excise (Change in Management) Rules, 2009? - HELD THAT:- In the facts of the present case, changes in the Board of Directors as a result of appointment, death or retirement cannot imply rendering of any service by the Excise authorities since the changes happened in the usual course of business. Thus, the justification of demanding an amount of Rs. 1.45 crores for such routine events in the usual course of business is contrary to the law laid down by the courts. Even if the petitioners are brought within the purview of the amended Rule 3 under the later Notification of 11th February, 2020, the petitioners would be protected by Rule 3(i)(d) where ‘Change in Management’ in the case of a public limited company has been defined as any change in directorship other than appointment/cessation of independent directors within the meaning of The Companies Act, 2013 or any change of shareholding amongst shareholders beyond 10% of the existing shareholding pattern - There is admittedly no change in the shareholding pattern of the first petitioner in the period stated in the impugned letter of 24.6.2022. The petitioners agreeing to pay the composition fee in lieu of having their license suspended cannot be seen as waiver of the petitioners’ rights under the prevailing laws. There is no justification for the Excise Authorities in demanding the amount of Rs. 1.45 crores from the petitioners on the ground of changes in management - It is clear that the demand of fees for appointment, resignation, retirement and death of the directors of the petitioner no. 1 has no nexus with the perceived changes in the management and control of the petitioner no. 1. The respondents are seeking to interpret the 2009 Rules in a manner which is contrary to the settled law on the subject. The respondents cannot unjustly enrich themselves in a manner extraneous to the Rules and the law pronounced by the Courts. Petition allowed.
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