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TMI Blog2019 (7) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... and void; (B) YOUR LORDSHIPS may be pleased to stay order dated 23.1.2018 and order dated 14.5.2018 pending the admission, hearing and final disposal of this petition and further be pleased to direct the respondents to remove the attachment of the property situated at Survey No.783, Block No.480 Mouje Tranaj, Taluka: Matari, District: Kheda; (C ) YOUR LORDSHIPS be pleased to grant such other and further relief as may be deemed fit by this Hon'ble Court, in the interest of justice." 2. The case of the writ applicant, in its own words, as pleaded in the writ application, is as under: 2. The petitioner, by way of the present petition begs to challenge the order dated 23.1.2018 passed by respondent no.1 under 46, 47 and 48 of The Gujarat Value Added Tax (hereinafter referred to as "The Act") and consequent order dated 14.5.2018 passed by respondent no. 2 attaching the property of the petitioner situated at Survey No.783, Block No.480 Mouje Tranaj, Taluka: Matar, District: Kheda. The petitioner begs to Annex copies of the impugned orders dated 23.1.2018 and 14.5.2018 at Annexure-A colly. 3. The petitioner challenges the same on following among other grounds; (I) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2016 this Hon'ble Court was pleased to dispose of the said petition on the ground that the attachment of the immovable property which was subject matter of the petition lapsed upon completion of period of one year from date of issue of the order dated 24.2.2014. This Hon'ble Court had further recorded that the authority shall act on lapsing of the order of attachment. Annexed hereto and marked as Annexure-G is a copy of the order dated 9.6.2016. 4.6 The petitioner states that however, again vide order dated 23.1.2018, the respondent no.1 passed an order under section 46, 47 and 48 of the Act attaching the property of the petitioner for the dues of respondent no.3 company. The petitioner states that by the impugned order passed against respondent no.3, respondent no.1 has attached the property of the petitioner without giving any opportunity of hearing to the petitioner. The petitioner has already annexed a copy of the impugned order at Annexure-A. 4.7 The petitioner states that in the impugned order, against the property of the petitioner company the name of Shrimati Darshnaben Tarunkumar Jain and Shri Tarunkumar is shown as owners of the property. Whereas, the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty in question. The order passed by the Mamlatdar creates a charge of the State Government over the property in question. 4. Being dissatisfied with such action on the part of the respondent No.1, the writ applicant has come up with this writ application with a prayer that the order of attachment could not have been passed as the land is of the ownership of the writ applicant and the writ applicant is not a defaulter under the provisions of the Act, 2003. 5. Mrs. Pahwa, the learned counsel appearing for the writ applicant vehemently submitted that the order passed by the respondent No.1 as well as the order passed by the respondent No.2 is erroneous being contrary contrary to the provisions of the Act, 2003. Mrs. Pahwa submitted that the impugned order of attachment has been passed by the respondent No.1 in exercise of powers under Section 46 of the Act, 2003. Section 46 is with respect to the special powers of the tax authorities for recovery of tax as arrears of land revenue. Mrs. Pahwa submitted that Section 46 makes it abundantly clear that the recovery of the amount of tax, penalty or interest should be due from any dealer or other person by or under the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the attached property is of the ownership of the writ applicant and not that of the respondent No.3. She also very fairly conceded to the fact that it is the respondent No.3 who could be termed as a dealer within the meaning of Section 46 of the Act, 2003 and the dues are recoverable from the respondent No.3 and not the writ applicant. However, Ms. Mehta pointed out that the two directors of the writ applicant-Company also happen to be the directors of the respondent No.3-Company and, in such circumstances, the attached property could be said to be of the ownership of the writ applicant too. Ms. Mehta invited the attention of this Court to the averments made in the affidavitin- reply filed on behalf of the respondent No.1, duly affirmed by one Shri Chirag Lallubhai Patel, State Tax Officer, Ahmedabad City. She placed reliance on the following averments; "6. The present Petition has been preferred by the petitioners, challenging the orders dated 23.01.2018 and 14.05.2018 with respect to the attachment on the property situated at survey no.783, plot no. 480 mouje Tranaja, Taluka: Matar, District: Kheda. The main contention raised by the petitioner is that the attachment ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has been committed and therefore, the present attachment orders may kindly not be disturbed. Copies of the assessment orders and demand notices are annexed herewith and marked as Annexure-R1 (Colly)." 11. In such circumstances, referred to above, Ms. Mehta prays that there being no merit in this writ application, the same be rejected. ANALYSIS 12. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the immovable property of the ownership of the writ applicant could have been attached for the purpose of recovering the dues payable by the respondent No.3 under the Act, 2003. 13. Before adverting to the rival submissions canvassed on either side, we must look into few relevant provisions of the Act, 2003. 14. Clause 2(10) of the Act, 2003 defines the word 'dealer'. The same reads as follows:- "dealer" means any person who, for the purpose of or consequential to his engagement in or, in connection with or incidental to or in the course of his business buys, sells, manufactures, makes supplies or distributes goods, directly or otherwise, whether fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of this Act. (ii) The Central Government or a State Government or a local authority or railway administration or port trusts or a statutory body, which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act. (iii) Any person or body, which disposes of any goods including unclaimed, confiscated, unserviceable, scrap, surplus, old, obsolete, discarded, waste or surplus product or goods, whether by auction or otherwise, directly or through an agent, for cash deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act. Exceptions.-- The following shall not be deemed to be a dealer within the meaning of this clause, namely:- (i) an agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally; (ii) an individual who sells exclusively any fish or any seafood caught by him personally or by any member of his family on account of or on behalf of such individual; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (2). (5) If the amount of tax and penalty, if any, is not paid within the time specified in sub-section (1) or extended under sub-section (2), as the case may be, the dealer or the person liable therefor shall be deemed to be in default in respect of that amount. (6) Where the amount of tax assessed or reassessed for any period, under section 34 or section 35, subject to revision, if any, under section 75, exceeds the amount of tax already paid by a dealer for that period, there shall be paid by such dealer, for the period commencing from the date of expiry of the time prescribed for payment of tax under sub-section (1), (2) or (3) of section 30 and ending on date of order of assessment, reassessment or, as the case may be, revision, simple interest at the rate of eighteen per cent per annum on the amount of tax not so paid or any less amount thereof remaining unpaid during such period. (7) Where a dealer does not pay the amount of tax falling under subsection (1) on or before the prescribed date, then there shall be paid by such dealer for the period commencing on the specified date and ending on the date of payment, simple interest at the rate of eighteen per cent per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt of the notice referred to in this section, shall be personally liable to the Commissioner to the extent of the liability discharged or to the extent of the liability of the dealer for tax, penalty and interest, whichever is less. (5) Where a person to whom a notice under this section is sent objects to it by a statement in writing that the sum demanded or any part thereof is not due or payable to the dealer or that he does not hold any monies for or on account of the dealer, the Commissioner shall hold an inquiry and after giving to such person or dealer a reasonable opportunity of being heard, make such order as he thinks fit. (6) Any amount of monies which the aforesaid person is required to pay to the Commissioner, or for which he is personally liable to the Commissioner under this section shall, if it remains unpaid, be recoverable as an arrears of land revenue. (7) The Commissioner may apply to the court in whose custody there is monies belonging to the dealer for payment of the amount of such monies towards the outstanding amount of tax, interest and penalty payable by the dealer." 18. Section 45 provides for the provisional attachment. The same reads as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any tax or any other sum payable by the dealer." 21. Section 48 clarifies that any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer or as the case may be, such person. 22. It appears from the materials on record that the impugned order passed by the respondent No.1 dated 23.1.2018 is one of provisional attachment as provided under Section 45 of the Act, 2003. Section 45 makes it very abundantly clear that during the pendency of any proceedings of assessment or reassessment and turnover, escaping assessment, the Commissioner, with a view to protect the interest of the Government Revenue, may by order in writing, attach provisionally any property belonging to the dealer. Section 45 further clarifies that such provisional attachment would cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1). Section 46 confers special powers to the tax authorities for recovery of the tax as arrears of land revenue. 23. To our understanding, more particularly, having regard to the scheme of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in question. The law is amply clear that even the dues of the private limited company cannot be recovered from the personal property of the director, if any, in the absence of any provisions to that effect in the Act, 2003. Be that as it may, the entire approach of the State Authorities in this regard is incorrect and not sustainable in law. 25. The writ applicant is the lawful owner of the attached land. The property, which has been attached, might have been given on lease to the respondent No.3, but by virtue of the same, it cannot be said that the property is of the ownership of the respondent No.3. The relationship is just of a lessor and lessee. The land, as on date, belongs to the writ applicant-Company. 26. Although, it is not necessary for us to look into and discuss the two judgments referred to and relied upon by Mrs. Pahwa, the learned counsel appearing for the writ applicant, we may refer and look into the same. 27. In Jwelly Tea Co. (supra), a Coordinate Bench of this Court had observed as under:- "8 Another aspect of the matter is that the expression 'dealer' has been defined under section 2(10) of the Act to mean any person who, for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. The Legislature having treated a Hindu undivided family as a taxable entity distinct from the individual members constituting it, and proceedings for assessment and recovery tax having been taken against the Hindu undivided family, it was not open to the Tax Recovery Officer to initiate proceeding against the manager of the Hindu undivided family for his arrest and detention. It is true that if properties of the family, movable and immovable, are to be attached proceedings may be started against the Hindu undivided family and the manager represents the family in proceedings before the Tax Recovery Officer. But by the clearest implication of the statute the assessee alone may be deemed to be in default for non-payment of tax, and liability to arrest and detention on failure to pay the tax due is also incurred by the assessee alone.The manager by virtue of his status is competent to represent the Hindu undivided family, but on that account he cannot for the purpose of Section 222 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attachment notice dated 27.12.2017, is required to be quashed and set aside as the controversy in question is squarely covered by the above referred decision of this court. Other contentions raised by the learned advocates for the respective parties are not gone into in view of the settled position of law that the dues of the Private Limited Company cannot be recovered from the personal property of the Director in absence of any provisions to that effect in the Sales Tax Act. " 31. Ms. Mehta, the learned AGP laid much emphasis on the words "other person" figuring in Section 46 of the Act, 2003. The words "other person" should be read in context with Section 44 of the Act, 2003. Section 44 provides for the special mode of recovery. Section 44 reads thus: "44. Special mode of recovery:- (1) Notwithstanding anything contained in any law or contract to the contrary, the Commissioner may, at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the dealer at his last known address, require,-- (a) any person from whom any amount of monies is due, or may become due, to a dealer on whom notice has been served under sub-section (1), or (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies towards the outstanding amount of tax, interest and penalty payable by the dealer." 32. In context of section 44, referred to above, the words "other person" means a person from whom any amount of money is due or may become due to a dealer on whom notice has been served under sub-section (1) or any person who holds or may subsequently hold money for or on account of such dealer. The writ applicant herein will not fall within the ambit of the words "other person". 33. One aspect which needs to be clarified is that only the land belongs to the writ applicant. What has been leased is the open land. The plant and machinery is of the ownership of the respondent No.3. There should not be any difficulty in attaching the plant and machinery of the ownership of the respondent No.3. However, the land of the ownership of the writ applicant could not have been attached. 34. In the same manner, upon such attachment, there could not have been any charge created in favour of the State Government and a revenue entry could not have been mutated in that regard in the record of rights. 35. In the result, this writ application succeeds and is hereby allowed. The impugned orders dated 23.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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