1977 (1) TMI 121 - SC - VAT and Sales Tax

Supreme Court Upholds Property Attachment for Unpaid Sales Tax

The Supreme Court upheld the High Court's decision to dismiss a petition challenging the attachment and sale of properties due to non-payment of sales ... Petition under article 226 of the Constitution of India filed by the appellant dismissed. Held that:- Appeal dismissed. As the sales tax due amount, however, was not paid in spite of the fact that ten days' time was granted to do the needful no valid ground to interfere with the judgment of the High Court, dismissing the writ petition filed by the appellant. Issues:1. Validity of the attachment and sale of properties due to non-payment of sales tax.2. Compliance with rules of procedure regarding service of notice in revenue recovery proceedings.3. Justification for dismissal of the writ petition challenging the attachment and sale.The Supreme Court judgment addressed an appeal against the Madhya Pradesh High Court's decision to dismiss a petition filed under article 226 of the Constitution by a registered firm, the appellant, due to non-payment of sales tax. The sales tax authorities issued a recovery certificate for Rs. 30,000, leading to the attachment and auction of the appellant's immovable and movable properties. Respondent No. 3 emerged as the highest bidder at the auction, offering Rs. 12,000 and Rs. 21,000 for the immovable and movable properties, respectively. The appellant contested the attachment and sale through the writ petition, which was ultimately rejected by the High Court.Regarding the service of notice in the revenue recovery proceedings, the appellant argued that the notice was affixed instead of being served personally, as required by the rules of procedure. The appellant contended that the procedure followed did not align with the prescribed rules for revenue officers and revenue courts. The appellant reiterated this argument before the Supreme Court, emphasizing rules 11 to 14, which mandate personal service or service on a recognized agent. However, the Court found the appellant's contention regarding non-compliance with the rules unfounded. The process-server's report indicated that the appellant's partners had refused to accept the notices multiple times. Additionally, the partners were well aware of the attachment and auction of the properties, as evidenced by their correspondence and actions. Despite being granted an extension to pay the outstanding sales tax, the appellant failed to comply, leading to the dismissal of the writ petition by the High Court.Ultimately, the Supreme Court upheld the High Court's decision, dismissing the appeal without costs. The Court found no valid grounds to interfere with the judgment, given the appellant's awareness of the proceedings and failure to fulfill their tax obligations despite opportunities to do so. The appeal was consequently dismissed, affirming the validity of the attachment and sale of the appellant's properties for non-payment of sales tax.