TMI Blog2006 (2) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs.73,28,029/- which is due for recovery in the form of duty and penalty from one M/s A. Arti Leathers Pvt. Ltd., which was operating from the petitioners' present factory premises before the petitioners took over the same. 4. The petitioner is a company carrying on the business of manufacturing leather cloth. One M/s A. Arti Leathers (hereinafter referred to as "the erstwhile unit") was carrying on the business of manufacturing leather cloth at the premises which are presently occupied and used by the petitioners. The said company had availed of a term loan from the Gujarat State Financial Corporation (GSFC) and had mortgaged its immovable property and hypothecated its movable plant and machinery to the GSFC to secure the said loan. Thus, the assets of the erstwhile unit comprised of land and building along with plant and machinery. The said unit having defaulted in payment of its dues, the GSFC put up its assets for auction. The petitioner being the highest bidder, its offer was accepted and the assets of the erstwhile unit were transferred in favour of the petitioner by the GSFC in the exercise of powers under Section 29 of the State Financial Corporation Act, 1951. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said industrial unit. That the sale in favour of the petitioners having been effected in the exercise of powers under section 29 of the SFC Act, the department was entitled to recover the dues of the erstwhile unit from the petitioners. That the action taken by the respondents was well within the period of limitation as show cause notice had been issued within the prescribed time limit, and that ever since the dues were confirmed, the respondents have been pursuing the recovery thereof before various forums. That there is nothing in the language employed in the amended provisions of section 11 to indicate that the same is applicable only to transfers effected after the insertion of the said provision. That no period of limitation has been prescribed for taking action under the provisions of the proviso to section 11, hence, there was no bar of limitation insofar as the action sought to be taken by the respondents is concerned. That, by the impugned communication dated 10/12/2004, the petitioners had been called upon to pay the dues of the erstwhile unit, however, no coercive action had been taken. That the petitioners had been given sufficient opportunity to put forth their v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March 1995, hence, the respondents cannot be permitted to invoke the said provisions in relation to the said assets after a period of almost ten years thereof. That it is a settled legal position, as laid down by the innumerable decisions of the Apex Court that even where the statute does not prescribe a period of limitation, action must be taken within a reasonable time. That a period of ten years can, by no stretch of imagination, be said to be a reasonable time. (6) That, from a perusal of the impugned communication, it is evident that the substantial portion of demand in question relates to amounts which had become due after the transfer of the unit, namely, after the first week of March 1995. That the demand to the extent of Rs.58,12,251/- was confirmed only on 16/10/2001 and the demand for Rs.61,920/- was in relation to an order dated 31st March, 1995. Thus, both the demands are evidently in relation to orders made after the date of transfer. That the proviso to section 11 of the Act contemplates the recovery of sums due at the time of the transfer of the assets of the predecessor unit and not to amounts which had become due subsequently. (7) That the penalty componen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d legal position that when no time limit is prescribed for exercise of a power under a statute, it does not mean that it can be exercised at any time; such power has to be exercised within a reasonable time. That any power conferred under a statute is required to be exercised in a reasonable manner which inheres the concept of its exercise within a reasonable time. 15. The Apex Court, in the case of Ibrahimpatnam Taluk Vyavasaya Coolie Sangham v. K. Suresh Reddy, [2003] 7 SCC 667, in the context of exercise of suo motu powers, has laid down as follows: "Exercise of suo motu power "at any time" only means that no specific period such as days, months or years are not prescribed reckoning from a particular date. But that does to mean that "at any time" should be unguided and arbitrary. In this view, "at any time" must be understood as within a reasonable time depending on the facts and circumstances of each case in the absence of prescribed period of limitation." 16. This Court, by a decision rendered on 16th December 2005, in the case of ANI Elastic Industries v. Union of India, Special Civil Application No.20528 of 2005, wherein a similar issue was involved, h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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