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2019 (8) TMI 715

..... d have been attached for the purpose of recovering the dues payable by the respondent No.3 under the Act, 2003? HELD THAT:- Once the liability of the defaulting dealer is assessed and fixed, the next step would be to recover the requisite amount with penalty or interest. Such amount can be recovered by the authorities under the Act, 2003 by way of land revenue measures as provided under the Bombay Land Revenue Code. Two things are very amply clear. The property of the ownership of the defaulting dealer can only be provisionally attached. The language of the statute is very clear. Section 45 provides that “he may by order in writing attach provisionally any property belonging to the dealer”. In such circumstances, in the first instance, the property which is of the ownership of the writ applicant could not have been attached for the purpose of recovery of the amount of tax, penalty or interest due and payable by the respondent No.3. It is not the case of the department that the writ applicant has defaulted, in any manner, with regard to payment of the tax under the Act, 2003. The argument of the learned AGP that the writ applicant would fall within the ambit of the words .....

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..... er in filing of the returns prescribed under the Act and as the dealer did not deposit the taxes, the Commercial Tax Department cancelled the registration certificate of the dealer w.e.f. 31/10/2012, against which the dealer preferred Appeals as provided under the Act. In the Second Appeals, the dealer succeeded before the Gujarat Value Added Tax Act Tribunal and the Tribunal quashed and set aside the orders passed by the Commercial Tax Officer and the Deputy Commissioner of Commercial Tax and consequently ordered to restore the Registration Certificate of the dealer. 2.03. Thereafter search was conducted on 20/11/2014 at the registered premises of the dealer. At the time of the search, the dealer was not present at the registered premises as he was on foreign tour for the business purpose but the petitioner who is father of the dealer was present. 2.04. Thereafter provisional assessment order was passed on 31/3/2015 for the years, 2011-12, 2012-13, 2013-14 and 2014- 15. calculating VAT liability plus penalties and interest to the tune of ₹ 57,51,985/-, ₹ 44,91,558/-, ₹ 36,02,789/- and ₹ 16,76,645/- respectively. 2.05. Thereafter, notice was issued on 12/3/2 .....

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..... has been committed by the respondent authority in passing the impugned order. 4.02. Ms.Mehta, further contended that the petitioner is father of the dealer and at the time of raid also he was present. She further contended that notice was issued to the petitioner under section 32 of the Act on 20/11/2014 and he was called upon for hearing on 10/12/2014. She contended that the petitioner herein has given statement that he is owner of the factory on which attachment is made and the dealer - Saurabh Nitinbhai Gajjar is his legal heir. However, she has fairly contended that the petitioner is not the dealer as per subsection (2) of section 10 of the Act and is not the owner of the residential premises and factory. 5.00. CONCLUSION : 5.01. 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 self-acquired property of the ownership of the writ applicant who is neither dealer nor agent, could have been attached for the purpose of recovering the dues payable by the respondent No.3 under the Act, 2003. 6.00. Before adverting to the rival submissions canvassed on either si .....

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..... xplanation.- (i) A society (including a co-operative society), club or firm or an association, which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, from or to its members or other persons for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes 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 follow .....

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..... default in respect of the whole of the amount then outstanding and the other installments shall be deemed to have been due on the same date as the installment in default. (4) Interest at the rate of eighteen per cent per annum shall be charged for the period as may be extended or the installments as may be granted under sub-section (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 rem .....

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..... the payment under the authority of the dealer, and the receipt thereof by the Commissioner shall constitute a good and sufficient discharge of the liability of such person to the extent of the amount specified in the receipt. (4) Any person discharging any liability to the dealer after receipt 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 a .....

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..... mortgage, exchange or any other mode of transfer whatsoever of any of his property in favour of any other person with the intention of defrauding the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer. 6.08. 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. 6.09. It appears from the materials on record that the impugned order passed by the respondent No.1 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 o .....

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..... nd, as on date, belongs to the writ applicant-Company. 6.13. In the case of State of Gujarat vs. Jwelly Tea Co., reported in (2016) 90 VST 501 (Gujarat), 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 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 for cash or for commission, remuneration or otherwise, which means any person who satisfies the requirement of that sub-section. Sub-section (15) of section 2 of the GVAT Act defines person to include an individual, a joint family or Hindu Undivided Family, etc. Therefore, the Act recognises a Hindu Undivided Family as a dealer and as a person. The legislature having treated a Hindu Undivided Family as a taxable entity, distinct from the individual members constituting it, it was not open for the appellant to attach the movable properties of an individual member. In this regard, reference may be made to the decision of the Supreme Court in the case of Kap .....

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..... 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 the Act of 1961 be deemed to be the assessee when the assessment is made against the Hindu undivided family and certificate for recovery is issued against the family. 7.00. Having regard to the principles enunciated in the above decision as well as in the light of the above discussion, this court is of the view that the Tribunal was wholly justified in holding that the property of the individual member of the Hindu Undivided Family could not be attached under section 45 of the GVAT Act. The impugned order passed by the Tribunal does not suffer from any legal infirmity so as to give rise to any question of law, much less a substantial question of law, warranting interference. The appeal, therefore, fails and is accordingly dismissed. 7.01. The ratio of the decision of this Court in Jwelly Tea Co. (supra) is that section 45 can be invoked by .....

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..... such dealer to such person. (2) The Commissioner may amend or revoke any such notice or extend the time for making any payment in pursuance of the notice. (3) Any person making any payment in compliance with a notice under this section shall be deemed to have made the payment under the authority of the dealer, and the receipt thereof by the Commissioner shall constitute a good and sufficient discharge of the liability of such person to the extent of the amount specified in the receipt. (4) Any person discharging any liability to the dealer after receipt 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) .....

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