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DIFFERENT SOLUTION MARKETING PRIVATE LTD AND 2 Versus ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND 2

Provisional attachment of personal property of the director in case of company - recovery of tax - Input tax credit - TIN number of the supplier was cancelled - GVAT - Held that:- Sub-section (1) of section 45 of the VAT Act provides that where during pendency of any proceedings of assessment or re-assessment of turnover escaping assessment, the Commissioner is of the opinion that for the purpose of protecting interest of the Government revenue, it is necessary so to do, he may order in writing .....

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essence, this provision makes the person incharge of the company responsible for the offence vicariously liable for the criminal action for which the company may have been charged. In the present case, we are not concerned with any such situation. The respondents have not disputed that the properties under attachment under the impugned order are the personal properties of the directors. - Attachment order set aside - Decided in favor of petitioner. - SPECIAL CIVIL APPLICATION NO. 19949 of 20 .....

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Different Solution Marketing Private Ltd., a company and to whom these petitioners are directors. 2. The said company is a registered dealer and is dealing in purchases and sales of steel. The Assistant Commissioner of Commercial Tax passed the said order attaching two residential properties of the petitioners on the ground that against the company in which they are directors, there is a possible tax, interest and penalty dues of ₹ 2.17 crores. In this order, he has recorded that upon peru .....

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ores. The dealer has neither clarified these issues nor paid up the taxes. Under the circumstances, to protect the interest of Revenue, he was prompted to attach two immovable properties of the directors. 3. Learned counsel for the petitioners submitted that the assessments for the period during which said input tax credit was availed are still going on. Before finalising the assessment, the authorities could not have sought recoveries of the entire possible tax with interest and penalty. He sub .....

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perties of the directors of the company could not have been attached for the possible dues of the company. In this respect, he relied on the decision of the Division Bench of this Court in the case of Choksi vs. State of Gujarat reported in (2012) 51 VST 73. 5. On the other hand, learned Assistant Government Pleader Ms. Jirga Zaveri relied on sections 45 and 86 of the Valued Added Tax Act, 2003 to contend that the order passed by the authority was justified and proper. She submitted that there a .....

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uld the personal properties of the directors have been attached ? 7. This issue came up for consideration before the Division Bench in the case of Choksi vs. State of Gujarat (supra) in which it was held and observed as under: 11. In view of the above factual position, it is not necessary to examine the controversy at length. Suffice it to state that the respondents are not in a position to point out any statutory provision empowering the sales-tax authorities to fasten the liability of Company .....

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there is dissolution of a partnership firm and also in case of transfer of business in whole or in part. Unlike Section 179 of the Income-tax Act, 1961, there is no provision in the Sales-tax Act fastening the liability of the Company to pay its sales-tax dues on its Directors. 12. Reliance placed by the learned AGP on the provisions of Section 78 is misconceived. The section specifically deals with offences by companies and the criminal liability is fastened on the Directors who were in charge .....

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s-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. .....

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