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of <h1>Court dismisses writ petition challenging VAT Act notice & Garnishee order, rejects post-merger benefits claim.</h1> <h3>M/s. Girdharilal Sugar & Allied Industries Ltd. Versus Commercial Tax Officer and others</h3> The court dismissed the writ petition challenging a notice under Section 24(5)(a) of the MP VAT Act and a Garnishee order under Section 28(1) of the VAT ... Validity of recovery order - garnishee order - Held that:- Since the petitioner has not deposited the admitted payable tax amount, the respondents have rightly issued the notice dated 7.10.2016 under Section 24(5)(a) of the VAT Act, 2002. Inspite of notice, the petitioner chooses not to pay the admitted tax liabilities and, therefore, the respondents have initiated the special mode of recovery by issuing the garnishee order dated 26.10.2016, which is an independent action under Section 28(1) of the M. P. Value Added Tax Act, 2002. Petition not maintainable. Issues:1. Challenge to notice under Section 24(5)(a) of the Madhya Pradesh Value Added Tax Act, 2002.2. Validity of Garnishee order under Section 28(1) of the VAT Act.3. Interpretation of benefits and concessions post-merger.4. Locus standi of the petitioner to raise objections.5. Recovery of admitted tax liabilities.6. Compliance with tax return submissions.7. Special mode of recovery through garnishee order.8. Reliance on past legal judgments.9. Application of Sick Industrial Companies Act, 1985 provisions.10. Impact of SICA Repeal Act, 2003.11. Effect of Insolvency and Bankruptcy Code, 2016.Analysis:1. The petitioner challenged a notice under Section 24(5)(a) of the MP VAT Act and a Garnishee order under Section 28(1) of the VAT Act. The petitioner argued that post-merger, all benefits and concessions granted to the transferor company should apply to them as well, citing Clause 16.3(c) of the sanctioned scheme. However, the State contended that the benefits under the scheme were specific to the transferor company and not automatically extended to the petitioner.2. The State emphasized that the recovery initiated was against the admitted tax liabilities of the petitioner, not the transferor company. The petitioner's lack of relief from BIFR or the State was highlighted, questioning their locus standi to challenge notices issued to other entities. It was clarified that the recovery actions were unrelated to the benefits granted to the transferor company under the sanctioned scheme.3. Despite submitting tax returns and paying VAT for previous years, the petitioner failed to pay the admitted balance for a specific year. This non-payment led to the issuance of the notice under Section 24(5)(a) and the subsequent garnishee order under Section 28(1) for recovery. The petitioner's attempt to avoid payment despite submitting returns was noted.4. The petitioner relied on past legal judgments and provisions of the Sick Industrial Companies Act, 1985, to support their case. However, the court referenced a specific case where proceedings before BIFR were deemed abated post the SICA Repeal Act, impacting the petitioner's entitlement to relief. The court also considered the Insolvency and Bankruptcy Code, 2016, and related notifications, leading to the dismissal of the writ petition.5. In conclusion, the court dismissed the writ petition, citing the impact of the Insolvency and Bankruptcy Code and related notifications, rendering the petition not maintainable. The judgment highlighted the evolving legal landscape post the repeal of the Sick Industrial Companies Act and the introduction of new insolvency laws, leading to the dismissal of the petitioner's claims.
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