TMI Blog2018 (10) TMI 1563X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No.4 does not appear to be correct. It is an admitted fact that entire business of the respondent No.4 has been transferred to the petitioner and Ujjain Treasure Bazar Mall was under the control and possession of the petitioner. The properties, which were subject to mortgage has been transferred in favour of the petitioner by a consent decree. As per Clause 1(d) and 1(k), the petitioner has virtually taken over the entire business, which they are running since 2013 and, therefore, Section 87(c) applies with full force. The Finance Act and Clause 1(d) and 1(k) Memorandum of Understanding (MoU) are very clear and specific. The transactions so been entered between the parties is covered by Section 87(c) of the Service Tax Act - In the case in hand, as per proviso to Section 87(c) of the Finance Act and Clause (d) and (k) of MoU dated 01.07.2013, the Department is empowered to recover the dues of service tax of respondent No.4 from the present petitioner, who had purchased the mortgaged property of the respondent No.4 from respondent No.5 by a consent decree. Petition dismissed - decided against petitioner. - W.P. No.3094/2017 - - - Dated:- 22-10-2018 - Justice Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and and mall on 15.11.2013, which then stood vested in respondent No.5. Before the DRT, the respondents No.4 and 5 arrived at One Time Settlement (OTS) for a total amount of ₹ 47,51,00,000/- (Rs. Forty Seven Crores, Fifty One Lacs). Out of the said sum ₹ 47.51 Crores an amount of ₹ 10.00 Crores were to be paid by the respondent No.4 directly to the respondent No.5. Further a sum of ₹ 37.51 Crores were to be realised by sale of secured assets, i.e ., the land and building known as Ujjain Treasure Bazar Mall , situated at Ujjain. This property was agreed to be sold by the respondent No.5 as mortgagee in possession to the petitioner for ₹ 37.51 Crores. 6. In furtherance of the above, the respondent No.5 executed a Deed of Assignment in favour of the petitioner on 08.02.2016 which was duly stamped and registered before the Sub-Registrar of Documents and Assurances, Ujjain under the Deed of Assignment, in consideration for discharging the debt owed to respondent No.5, the petitioner acquired the rights to the said land and the Mall. 7. After acquisition of the mall, the petitioner has become the absolute owner of the mall and is in possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The impugned demand notices states that an amount of ₹ 1,22,21,493/- as service tax. 15. The impugned notices further state that out of total recoverable amount of ₹ 7,79,80,171/-, a sum of ₹ 95,80,699/- is recoverable immediately as no stay has been granted in respect thereof by the appellate authority. In respect of the balance amount of ₹ 6,83,99,472/-, the impugned notice states that recovery proceedings would be initiated in the event of dismissal of the appeal preferred by the respondent No.4. Accordingly, the petitioner was called upon to pay the amount of ₹ 95,80,699/- to the Principal Commissioner, Customs, Central Excise and Service Tax, Headquarter, Indore on a priority basis. The stand of the petitioner is that it had not taken over any of the respondent No.4's liabilities and that therefore, no amounts were due to be paid by the petitioner. Section 87(c) of the Finance Act, has no application to the petitioner. 16. It is submitted that the respondent No.1 has without affording any opportunity of hearing issued order of attachment dated 4/03/2017 pursuant to the Certificate issued by respondent No.2 Assistant Commissioner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner on 8/02/2016 without the business and trade and, therefore, the action of respondents Nos.1 to 3 are illegal and respondent No.5 SICOM Ltd. has no objection if the writ petition is allowed. 20 . Shri Sumit Nema, learned Senior Counsel appearing on behalf of respondent No.4 has raised preliminary objection on the ground that the appeal filed by the respondent No.4 vide ST. No.5085-2015 is pending and the outcome of the aforesaid appeal will decide the date of demand and if credit is held to be correctly taken the demand of subsequent period would automatically become nil and supported the case of the petitioner and prayed that the writ petition be allowed. 21. Shri Prasanna Prasad, learned counsel appearing on behalf of respondents No.1 to 3 has raised a preliminary objection regarding maintainability of writ petition against Exhibit-1 and Exhibit-2 and submitted that as per section 85(1) of the Finance Act any person aggrieved by any decision or order passed by an adjudicating authority subordinate to the Principal Commissioner of Central Excise or Commissioner of Central Excise may appeal to the Commissioner and submitted that the respondent No.4 borrow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of, in consequence of which he is succeeded in such business or trade by any other person, all goods, in the custody or possession of the person so succeeding may also be attached and sold by such officer empowered by the Central Board of Excise and Customs, after obtaining the written approval of the 3[Principal Commissioner of Central Excise or] Commissioner of Central Excise, for the purposes of recovering such service tax or other sums recoverable or due from such predecessor at the time of such transfer or otherwise disposal or change.] 25. Section 88 of the Finance Act, 1994 is reproduced as under :- 88. Liability under Act to be first charge.- [1]88. Liability under Act to be first charge.- Notwithstanding anything to the contrary contained in any Central Act or State Act, any amount of 2[tax], penalty, interest, or any other sum payable by an assessee or any other person under this Chapter, shall, save as otherwise provided in section 529A of the Companies Act, 1956 (1 of 1956) and the Recovery of Debts Due to Banks and the Financial Institutions Act, 1993 (51 of 1993) and the Securitisation and Reconstruction of Financial Assets and the Enforcement of Secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner. The properties, which were subject to mortgage has been transferred in favour of the petitioner by a consent decree. As per Clause 1(d) and 1(k), the petitioner has virtually taken over the entire business, which they are running since 2013 and, therefore, Section 87(c) applies with full force. 29. The scheme of Service Tax Act, provides for statutory appeal under Section 85 of the Service Tax Act. The respondent No.1 vide letters dated 17.02.2017 and 22.02.2017, had served a notice of demand to defaulter , to the respondent No.4. They were further informed that in case of default, steps would be taken to realise the amount in accordance with the provisions of Section 87(c) of the Finance Act, 1994. Thus, the contention of the petitioner that without giving the petitioner or respondent No.4 opportunity of hearing or without taking into account the representations made by the petitioner and the respondent No.4 is incorrect because number of opportunities were given to them prior to initiating action under Section 87(c) of the Finance Act. 30. The Finance Act and Clause 1(d) and 1(k) Memorandum of Understanding (MoU) are very clear and specific. The transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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