TMI Blog2022 (12) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... e defaulter namely Tvl.Srinivasa Chemicals Pvt. Ltd. would have been entitled to file an application to settle the case - To be eligible for the benefit of the Settlement Act, 2010, the person should have been a dealer within the meaning of Section 2(1)(a) r/w Section 2(1)(e) of the said Act. The respondent herein (i.e.petitioner in W.P.Nos.2784, 2775, 2780, 2781, 2788, 2785 2787 of 2020) was not a dealer . The respondent has also not stepped into the shoes of the defaulting dealer viz. Tvl.Srinivasa Chemicals Pvt. Ltd., to avail the benefit of the Settlement Act, 2010 - The respondent has also not produced any documents to substantiate that the respondent was a dealer for the purpose of Section 2(1)(a) r/w Section 2(1)(e) of the Act - The respondent herein was merely an auction purchaser who purchased the stressed asset of defaulter Tvl. Srinivasa Chemicals Pvt. Ltd. in as is where is condition for a bid amount of Rs.70,00,000/- in the auction held on 01.12.2009 by the TIIC. Considering the fact that concession was given by entertaining the applications filed by the respondent under the aforesaid Act and considering the fact that the order of the Designated Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty in question shall stand lifted forthwith . 4. The prayer in the respective Writ Petitions are similar. Only the amount offered by the respondent and assessment year are different. For the sake of clarity, the prayer in W.P.No.2781 of 2020 is reproduced sample below as a representative sample:- Writ petition filed under Article 226 of the Constitution of India to issue a writ of Certiorarified Mandamus calling for the records relating to proceedings of the Respondent in R.C.No.6363/2019/B3-III and quash the same and direct the respondents to receive a sum of Rs.8,06,783/- from the petitioner towards the balance of amount payable for consideration and acceptance of the petitioner's application dated 25.08.2010 made under Section 5(1) of Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010 for the assessment year 1992-93, and consequently issue Certificate under Section 8 of the Act. 5. In these Writ Petitions, the respondent had prayed for quashing of the impugned order therein and for a consequential direction to direct the appellants herein to receive a sum of consolidated sum of Rs.34,59,397 /- over and above a sum of Rs.27,46,034/- already paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available) and produced before the Writ court) 7. Thus, by the impugned order, the learned Single Judge has ordered refund of Rs.14,41,755 /- [27,46,034 - 13,04,279] out of Rs.27,46,034/- paid by the respondent. 8. The total amount quantified by the appellants to be paid by the respondent was Rs.68,95,224/- towards tax dues . Whereas, in the writ petition, the respondent in his writ petition tacitly admitted a liability of Rs.62,05,701/- (27,46,304 + Rs.34,59,397/-) in a bid to settle the sales tax arrears under the provisions of the Settlement Act, 2010. 9. Thus, the scope of dispute in the above writ petitions was confined to only Rs. 6,89,523 /- (68,95,224 62,05,701) as detailed below:- Amount agreed to be paid by the Respondent Amount in dispute in the WP 62,05,701 (27,46,304 + 34,59,397) 6,89,523 (68,95,224 62,05,701) 10. However, by the impugned order, the learned Single Judge has ordered retention of a sum of Rs.13,04,279 /- only, even though the respondent himself prayed that the appellants should be directed to accept a sum of Rs.34,59,397 /- over and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction was held on 01.12.2009. The respondent participated in the said auction and was declared as the highest bidder. Later a formal sale deed was also executed on 10.08.2010 in favour of the respondent. 18. Relevant clause from the sale deed dated 10.08.2010 executed by TIIC in favour of the respondent herein, reads as under:- 7. The purchaser hereby declares that taxes, levies, statutory and other liabilities etc, if found due in respect of the schedule property shall be borne and paid by the purchaser without any reference to the vendor . 19. The recital from the above sale deed makes it clear that the purchaser of the property in the auction held on 01.12.2009 was to pay taxes and other statutory liability found in respect of the property without reference to TIIC. 20. After purchasing the property in auction and after execution of the sale deed dated 10.08.2010, the respondent herein filed applications on 25.08.2010 under Section 5(1) of the Settlement Act, 2010 to settle the tax arrears and for waiver of penalty and interest for the following assessment years under the repealed TNGST Act, 1959 and the CST Act, 1956 in respect of which the said borrower was in arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice Tax) Deferral Scheme and hence, ineligible for settlement of arrears under the Settlement Act, 2010; and (ii)90% of the amount payable under the Settlement Act, 2010 was not paid by the respondent . 26. Thereafter, W.P.No. 817 to 823 of 2011 were taken up for final hearing. Orders dated 14.11.2017 passed by the first appellant herein were withdrawn as it was passed during the subsistence of the stay order. 27. The court thus directed the respondent to appear before the first appellant and answer to the Show Cause Notice dated 08.09.2011. The above writ petitions were finally disposed on 17.09.2019 by directing the first appellant herein to hear the respondent and to thereafter pass orders either accepting or rejecting the applications filed under the Settlement Act, 2010. 28. Pursuant to the directions issued by the court in the above writ petition, the respondent herein filed a reply dated 28.09.2019 to the Show Cause Notice dated 08.09.2011 and expressed willingness to pay the balance amount. 29. Thus, an order dated 23.10.2019 was passed by the first appellant herein. By the aforesaid order the first appellant rejected the applications filed by the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es tax was paid cannot be accepted as it is the duty of the respondent/applicant to verify all the details entered in the application and act according to procedures known to law. 38. We have considered the arguments advanced by the learned Additional Advocate General for the appellants and by the learned counsel for the respondent. 39. The point for determination in these Writ Appeals are as under:- (i) Whether the respondent was a dealer within the meaning of Section 2(1)(a) r/w Section 2(1)(e) of the Settlement Act, 2010 and therefore eligible to file a declaration under the Settlement Act, 2010 or whether the respondent stepped into the shoes of the tax defaulter namely Tvl.Srinivasa Chemicals Pvt. Ltd., while purchasing the assets of the defaulter in an auction. (ii) Whether in the facts of the case, the order of the learned Single Judge requires to be interfered or not? 40. Prior to Settlement Act, 2010, a Scheme under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2006 was there. There was a specific bar for filing an application for settling the dues on a person who had availed deferral and had defaulted. However, under the Settlement Act, 2010, such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement Act, 2010. 49. However, considering the fact that concession was given by entertaining the applications filed by the respondent under the aforesaid Act and considering the fact that the order of the Designated Authority was not challenged by the Commercial Tax Department in the manner known to law, we do not wish to deny the partial benefit conferred on the respondent vide impugned order dated 29.04.2021 under the Settlement Act, 2010 impugned in the W.P.Nos. 2784, 2775, 2780, 2781, 2788, 2785 2787 of 2020. 50. It was not open for the respondent to shift the burden on the appellants to furnish the details of the assessment orders. Assessment Orders would have been passed by the Assessing Officer during the relevant assessment years under the provisions of TNGST Act, 1959 and CST Act, 1956. During the course of hearing, the originals of the records and ledgers maintained by the Commercial Tax Officer showing the assessment made on the defaulter Tvl. Srinivasa Chemicals Pvt. Ltd were produced. 51. The respondent has purchased litigated property knowing fully well that there were arrears/ tax dues from the said defaulter Tvl.Srinivasa Chemicals Pvt. Ltd. to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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