Court quashes NOC request, rules against unreasonable dues demand.

The court quashed the communication requesting an NOC for transfer of plot ownership and change in the Board of Directors. It directed GIDC to proceed with the changes without the NOC requirement, as the property did not belong to the defaulting party. The court found the demand notice for dues from 2003-2008 unreasonable and time-barred, emphasizing timely exercise of powers. The petitioner's challenge against the attachment notice and recovery demand from M/s. Mahalaxmi Processors was upheld, with the court ruling in favor of the petitioner without costs.

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Issues Involved:
1. Validity of the attachment notice and demand recovery from M/s. Mahalaxmi Processors.
2. Legitimacy of the condition imposed by GIDC for obtaining an NOC from the Central Excise Department for transfer of the plot and change in the Board of Directors.

Issue-wise Detailed Analysis:

1. Validity of the attachment notice and demand recovery from M/s. Mahalaxmi Processors:

The petitioner challenged the attachment notice dated 11.12.2013 and the demand recovery for dues crystallized between 2003 and 2008. The petitioner argued that no timely action was taken by the respondents to recover these dues, and the notice issued in 2013 was barred by limitation. The court referenced the decision in Valley Velvet Private Limited v. Union of India, highlighting that powers must be exercised within a reasonable time if no time limit is prescribed. The court found that the demand notice issued after considerable delay was not reasonable and thus barred by limitation. Furthermore, the court noted that the property was transferred to the petitioner in 2007, and subsequent dues of M/s. Mahalaxmi Processors could not be recovered from the petitioner.

2. Legitimacy of the condition imposed by GIDC for obtaining an NOC from the Central Excise Department for transfer of the plot and change in the Board of Directors:

The petitioner sought to quash the condition imposed by GIDC requiring an NOC from the Central Excise Department for the transfer of plot No.821 and change in the Board of Directors. The court examined the lease deed and assignment records, confirming that the plot was transferred to the petitioner in 2007 and that M/s. Mahalaxmi Processors had no right, title, or interest in the plot. The court analyzed Section 11 of the Central Excise Act, which allows for the recovery of dues by attachment and sale of excisable goods belonging to the defaulter. The court found that the basic requirement for invoking Section 11 was not met, as the plot did not belong to M/s. Mahalaxmi Processors. Additionally, the court noted that Section 11E, which creates a first charge on the property of an assessee, was introduced after the plot was transferred to the petitioner and thus did not apply. Consequently, the court held that the Central Excise authorities had no legal basis to demand an NOC for the transfer of the plot and change in the Board of Directors.

Judgment:

The court quashed the communication dated 20.5.2014 by the Superintendent of Central Excise, which requested GIDC not to change the ownership of the plot without an NOC. The court directed GIDC to effect the change in the constitution of the Board of Directors of the petitioner company without insisting on compliance with the condition of obtaining an NOC from the Central Excise Department. The petition was allowed to this extent with no order as to costs.

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