Court rules in favor of transfer, clarifies tax liabilities. GIDC to proceed upon compliance.

The Court held that the Central Excise Department had no legal basis to prevent the transfer of property due to outstanding dues, clarifying that only statutory liabilities related to taxes like sales tax and stamp duty were applicable. The Court directed the GIDC to proceed with the transfer upon the petitioners' compliance with the application requirements and fees, allowing the transfer to be completed within four weeks. GIDC was authorized to recover its dues as per the law. The petition was granted, and no costs were awarded.

---

---

Issues:
Challenge to action of respondents in preventing transfer of land and building, Central Excise Department's insistence on payment of outstanding dues before issuing NOC, GIDC's role in the transfer process.

Analysis:
The petitioners challenged the respondents' action in obstructing the transfer of land and building located at a specific plot. The assets were acquired at a public auction under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioners were required to obtain a 'No Objection Certificate' (NOC) from the Central Excise Department for the transfer, but the NOC was withheld due to outstanding duty liabilities of the previous owner, M/s. Sun Polytron Industries Limited.

The advocate for the petitioners argued that the Central Excise Department lacked the authority to prevent the property transfer based on the outstanding dues. However, the Central Excise Department justified its stance by referring to the auction terms that mandated the discharge of all statutory liabilities before the NOC issuance. On the other hand, the GIDC, as a statutory Corporation, stated that it could only transfer the property after receiving the application in the prescribed format and settling any outstanding dues.

The Court noted that the Central Excise Department had no legal basis to intervene in the property transfer process to recover dues. The Court emphasized that GIDC could demand payment of its own dues before transferring the property but could not enforce the recovery of Central Excise Department's dues from the petitioners. The clauses in the auction terms regarding statutory liabilities were interpreted to pertain to taxes like sales tax, purchase tax, and stamp duty, not Central Excise dues.

Consequently, the Court directed GIDC to proceed with the property transfer upon the petitioners' submission of the required application and fees. The transfer was to be completed within four weeks of receiving the application, with GIDC authorized to recover its dues in accordance with the law. The petition was allowed, and the rule was made absolute with no order as to costs.

---