2003 (10) TMI 500

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..... Subse-quently, auction was confirmed and the petitioner had paid a sum of Rs. 17,48,182. It is the case of the petitioner that even though a substantial amount had been paid and the petitioner was prepared to pay the balance amount to take delivery, the respondent did not accept the same. At this stage, the respondent issued a show-cause notice wherein it was pointed out that the firm of M/s. Sri Mahalakshmi Flour Mills, Bangalore, had taken sandalwood on earlier occasion and was liable to pay a huge amount towards sales tax and penal interest and demurrage charges, and filed W. P. No. 2239 of 1994 and had obtained interim order subject to condition to the effect that the bank guarantee towards sales tax amount of Rs. 20,07,209 and Rs. 80....

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....er to the effect that the confirmation issued is withheld until renewal of the bank guarantee or until disposal of the appeal case in the High Court. 5. Such order has been challenged by the petitioner, viz., on the ground that the petitioner which has been incorporated under the Companies Act is a distinct entity and merely because two directors are also partners in the firm, viz., M/s. Sri Mahalakshmi Flour Mills, both the entities cannot be treated as the same. Learned counsel appearing for the petitioner has placed reliance upon the decision reported inAron Saloman v. A. Saloman & Co. Ltd. [1897] AC 22 (HL). 6. Learned counsel appearing for the respondent, on the other hand, contended that even though in law, the company is a differen....

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....t AIR 1997 SC 361; (iii) Delhi Development Authority v. Skipper Construction Co. (P.) Ltd. [1996] 4 SCC 622/[1997] 89 Comp. Cas. 362 (SC); (iv) Subra Mukherjee v. Bharat Coking Coal Ltd. [2000] 101 Comp. Cas. 257 (SC); (v) Calcutta Chromotype Ltd. v. Collector of Central Excise [1998] 3 SCC 681. 9. In all these decisions the principle enunciated in Sri Meenakshi Mills Ltd.'s case (supra) has been reiterated. 10. The principles enunciated in these decisions would be applicable to a particular factual position. In the present case, in the impugned order nothing has been indicated as to why the respondent considered the firm and the company to be the same legal entity. 11. It is found that some partners in the firm are the directors of t....