2016 (4) TMI 453 - HC - Service Tax

Petitioner granted name change, issues clarified on service tax, bank account attachment, court orders, and account validity.

The court allowed the petitioner company to change its name to 'SVOGL Oil Gas and Energy Limited' and addressed various issues including the ... Change of corporate name - interim protection - attachment and garnishee order - recovery of statutory dues - winding upChange of corporate name - The petition to reflect the Petitioner's new name in the cause title was allowed. - HELD THAT: - The Registrar of Companies issued a certificate dated 17th August 2015 effecting the name change to SVOGL Oil Gas and Energy Limited. On that basis the Court permitted the application under CM No.13027/2016 and directed that the Petitioner's name be shown as 'SVOGL Oil Gas and Energy Limited' in the cause title. [Paras 1, 2]Application allowed; cause title to show the Petitioner as 'SVOGL Oil Gas and Energy Limited'.Interim protection - recovery of statutory dues - winding up - The interim arrangement previously put in place for disbursement of remittances was vacated and the Service Tax Department was not restrained from proceeding to recover dues. - HELD THAT: - Since the adjudication order dated 19th February, 2016 crystallised disputed service tax liability at over Rs. 445 crores, and a winding up petition under Section 433 of the Companies Act is pending before the Company Judge, the Court found no justification to continue the interim regime (under which one-third of remittances were paid to the Service Tax Department and two-thirds retained by the Petitioner). The Court observed that the learned Company Judge should determine how remittances should be disbursed among statutory and other priority dues and creditors. In view of these developments, the Court vacated the earlier interim orders dated 21st March 2014, 28th May 2014 and 22nd January 2016 and declined to continue the interim protection; the Department was permitted to proceed in accordance with law to recover its dues. [Paras 9, 11, 14, 15, 17]Interim arrangements vacated; parties to pursue remedies in accordance with law; Service Tax Department not restrained from recovery.Attachment and garnishee order - recovery of statutory dues - The attachment ordered by the Service Tax Department dated 6th February 2013 and the garnishee order dated 22nd August 2013 were not vacated. - HELD THAT: - The Court noted that the admitted service tax liability (including liability taken over from Max Tech) remained largely unpaid and that only part of the admitted sum had been paid over two years. Given the crystallisation of disputed dues by the adjudication order and the existing admitted liabilities, the Court found no reason to set aside or vacate the earlier attachment and garnishee orders and accordingly declined to disturb those orders. [Paras 16]Attachment and garnishee orders upheld; no vacation of those orders.Final Conclusion: The application for change of name was allowed; the Court vacated the earlier interim disbursement regime and refused to vacate the attachment and garnishee orders, permitting the Service Tax Department to proceed with recovery and leaving the parties to pursue statutory remedies, with the writ petition and pending applications disposed of. Issues:1. Change of petitioner company name2. Clarification/modification of previous order3. Service tax liability and attachment of bank account4. Interpretation of court orders regarding payment of service tax dues5. Modification of order regarding remittance of funds to STD6. Validity of attachment of petitioner's account by STDChange of Petitioner Company Name:The court allowed the application for changing the name of the petitioner company to 'SVOGL Oil Gas and Energy Limited' based on a certificate issued by the Registrar of Companies.Clarification/Modification of Previous Order:The petitioner filed an application seeking clarification/modification of a previous order. The background of the case involved the attachment of the petitioner's bank account by the Service Tax Department (STD) due to non-payment of service tax dues. The court had directed a portion of receipts to settle the dues, considering the petitioner's proposal to sell assets. Subsequently, an adjudication order was passed against the petitioner, creating a demand for service tax dues.Service Tax Liability and Attachment of Bank Account:The court noted the significant service tax liability of the petitioner, including disputed amounts. The petitioner sought interim protection to continue business operations, while the STD emphasized the need to recover dues. The court observed the crystallization of disputed service tax dues and the pending winding-up petition against the petitioner.Interpretation of Court Orders Regarding Payment of Service Tax Dues:The court addressed the interpretation of its previous orders regarding the remittance of funds to the STD. The petitioner requested clarity on the arrangement, while the respondents argued against continuing interim protection due to the substantial service tax liability.Modification of Order Regarding Remittance of Funds to STD:The petitioner sought modification of an order related to remitting funds to the STD, emphasizing the need to continue the existing arrangement for crediting a portion of remittances. The court considered the changed circumstances and the pending winding-up petition in deciding to vacate the interim arrangement.Validity of Attachment of Petitioner's Account by STD:The court discussed the validity of the attachment of the petitioner's account by the STD, considering the admitted service tax liability and payments made by the petitioner. It was concluded that there was no reason to vacate the attachment orders.In the final decision, the court vacated the interim arrangement, allowing parties to pursue remedies as per law. The writ petition and pending applications were disposed of, canceling the next hearing date.