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2017 (2) TMI 6 - ORISSA HIGH COURT

2017 (2) TMI 6 - ORISSA HIGH COURT - TMI - Recovery of arrear sales tax - whether the liability of arrear tax can be fastened on the dealer and on transfer of the ownership of the units of the dealer, the transferee becomes liable for arrear tax? - Held that: - this Court after taking into consideration the judgments rendered in the case of National Iron and Steel Rolling Corporation [1994 (12) TMI 72 - SUPREME Court], has been pleased to hold that the Corporation has converted into money assets .....

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Standing Counsel, Commercial Tax ORDER S. N. Prasad , J. This writ application is to quash the notice dated 5.4.2002 under Annexure-1. 2. The brief fact of the case of the petitioner -Corporation is that loan had been advanced in favour of opposite party no.4 for establishing a rice mill, but the loanee could not be able to repay the loan dues as a result of which the outstanding dues of the petitioner-Corporation on opposite party no.4 becomes ₹ 47,15,611.09. In spite of repeated notices .....

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ubject to the usual term of sale/ loan agreement. Opposite party no.4 was a defaulter under the Orissa Sales Tax Act and was having arrear dues of ₹ 15,46,097.00 under the Orissa Sales Tax Act. The arrear tax liability of the defaulter unit, the opposite party no.4, was not within the knowledge of the petitioner-Corporation at the time of taking over possession. The opposite party no.2, the Sales Tax Officer served a notice dated 3.4.2002 on the Branch Manager, OSFC, Sambalpur Branch under .....

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be fastened on the dealer and on transfer of the ownership of the units of the dealer, the transferee becomes liable for arrear tax. The provisions contemplated under Section 19 of the Orissa Sales Tax Act clearly provide that the transferor of ownership of the business and the transferee are liable to pay the arrear sales tax. The provision under Section 19(b) indicates that where the business in respect of which tax is payable is carried on by or in charge of any trustee, tax shall be recovera .....

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king into consideration the judgment passed by this Court, notice under Section 13(a)(b) of the Orissa Sales Tax Act has been issued and in consequence thereof, order has been passed on 6.4.2002 directing the petitioner-Corporation to pay into the Government treasury within seven days of receipt of notice if the money is due from him and as such, the authorities in the light of the proposition laid down by this Court have taken the decision. Hence, the same needs no interference by this Court. 4 .....

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r conferred under Section 29(1) of the Act, the Corporation sold the industrial concern. It was purchased by M./s.Sreeram Extractions (Pvt.) Ltd., at the time of taking over the industrial concern under Section 29 of the Act, there was liability of sales tax upon M/s. Indo-East Extraction Pvt. Ltd. The Corporation sold the aforesaid unit in exercise of power conferred under Section 29 of the Act. The Commercial Tax Authorities had issued notice to the Corporation calling upon it to discharge the .....

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entral Bank of India, the Corporation s banker to credit forthwith a sum of ₹ 17,47,880/-by way of draft in favour of the Sales Tax Officer and the said decision of the sales tax authorities was challenged before this Court in the said writ application. A coordinate Bench of this Court after taking into consideration the ratio laid down by the Hon ble Apex Court in the cases of State Bank of Bikanir, Jaipur v. National Iron and Steel Rolling Corporation, 96 STC 612 and Dena Bank v. Bhikhab .....

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the judgment rendered by the High Court of Rajasthan in the case of Rajasthan State Industrial Development and Investment Corporation Ltd. v. State of Rajasthan, AIR 1995 Rajasthan 219 in which it was held that the liability to sales tax for which a first statutory charge was available to the State, would prevail over the rights of the mortgagee even though the mortgage was first in point of time and accordingly, this Court has refused to interfere with the decision of the Sales Tax Officer by w .....

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come ₹ 47,15,611.09 and when in spite of repeated notice issued from the office of the petitioner-Corporation, the opposite party no.4 could not repay the loan dues, ultimately the Corporation took over of the industrial unit on 13.3.2002 and by exercising its jurisdiction conferred under Section 29 of the Act, sold it out in faovur of one Ajay Kumar Agarwala by way of public auction. At that juncture, the sales tax authorities had issued notice upon the Corporation asking the petitioner-C .....

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