TaxTMI 
TaxTMI 
2015 (6) TMI 183
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....vernment as an instrumentality of the State of Telangana. The petitioner has also been conferred a monopoly status in respect of the said activities in the State of Telangana, as such, the petitioner has Permanent Account Number, being AAFCTO204P, issued by the 3rd respondent. In the course of carrying on such business, on 27.2.2015 the aforesaid prohibitory orders and warrant of attachment of moveable property were issued restraining the petitioner from selling the liquor stock, which is the property of State of Telangana. The said prohibitory orders were issued contending incorrectly that the petitioner is the successor in business of Andhra Pradesh Beverages Corporation Limited (APBCL) under the provisions of Andhra Pradesh Reorganization Act, 2014 (hereinafter referred to as Act, 2014). It is also alleged that a sum of Rs. 1468,63,95,620/- was the proportionate amount due from the petitioner for the assessment year 2012-13. The aforesaid prohibitory orders and attachment orders were issued by the 2nd respondent under the provision of Rule 26 (1) (iii) of the second schedule to the Income Tax Act, 1961 (hereinafter referred to as Act, 1961). It is contended that prior to the imp....
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.... (2), the Tax Recovery Officer has to serve a warrant in writing specifying the name of the defaulter and the amount to be realized. The impugned prohibitory orders were issued without issuing warrant specifying the name of the defaulter and the amount to be realized. As such, the respondents have no jurisdiction to commence the tax recovery proceedings and to issue the impugned prohibitory orders under the law. The liquor stocks belong to the State of Telangana, and the same do not form the property of the petitioner. The petitioner is holding the said property only as an agent and custodian of the State of Telangana. The orders for supply and the invoices categorically show that the property, which is sought to be attached, belong to the State of Telangana, and not to the petitioner herein. The petitioner is not the successor in business of APBCL. The respondents never treated the petitioner as the successor of APBCL for the assessment proceedings 2012-13. The respondents also did not treat the petitioner as the successor of APBCL for the purpose of serving assessment order. Nonetheless, the respondents treated the petitioner as successor of APBCL only for the purpose of tax reco....
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....Subsequent to the accounting period relevant for the assessment year 2012-13, part of the assets and liabilities of the assessee, APBCL, stood transferred to the petitioner herein under Act 6 of 2014. Technically, no notice of demand was served on the petitioner under Section 156 of the Act, 1961 as the assessment order was passed for the assessment year 2012-13 during the accounting period relevant for the assessment year, when the petitioner herein was not in existence. The petitioner was incorporated only during the financial year 2014-15. It is contended that the petitioner must take liability including tax along with assets, indeed it has taken for the assessment year 2011-12. Accordingly, the tax liability of the petitioner works out to Rs. 1225,19,94,125/- relating to the assessment year 2012-13 and 2013-14. Since the assessee Corporation has not discharged its tax liability, recovery proceedings were initiated by the Tax Recovery Officer by issuing ITCP Nos.2 & 5 under Rules 20 & 26 (1) (iii) of the second schedule to the Act, 1961. As per the provision of Section 170 (3) of the Act, 1961, the assessing officer has recorded its finding vide letter dated 18.2.2015 wherein it....
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...., for which this action can be taken. Even the writ petitioner cannot be assessed to tax as it is a part and parcel of the State of Telangana. The composition of the petitioner would clearly show that it is absolutely an organ of the Government. So, it enjoys Constitutional immunity under Article 289 (1) of the Constitution of India. 5. According to him, the recovery has to be made in compliance with Sections 220 & 222 of the Act, 1961. It would appear from the aforesaid two Sections that there must be an assessment order against the assessee, followed by the notice of demand under Section 156 of Act, 1961, in case of failure of complying with the same the recovery proceedings can be started. Admittedly no assessment order has been passed against the petitioner nor the petitioner is a deemed assessee in default. The order of attachment or restraint order is also not in consonance with Section 222 read with Rule 26 (1) (ii) of the second schedule of the Act, 1961. The writ petitioner is not a transferee or the successor in interest of APBCL under the provisions of Act, 2014. Nothing has been succeeded by this petitioner as far as the assets and liabilities of the erstwhile APBCL ....
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....purposes of this section. 10. Now, looking at the provision of clause (ii) of sub-section (3) of Section 226 of the Act, 1961, as urged by Mr. Prasad, whether we can conclude the writ petitioner as a person holding any money for or on account of the assessee, so much so the tax can be recovered from It, in respect of the dues of APBCL is concerned. We think, on the facts narrated above, the answer is in negative for the reason stated hereunder. 11. By virtue of Section 68 read with Section 53 of Act, 2014, successor States of Andhra Pradesh and Telangana have acquired the assets and took over the liability in respect of the Companies and Corporations specified in the ninth schedule of Act, 2014. The APBCL is one of the Corporations as mentioned in ninth schedule being Item No.25. Sections 53 & 68 of Act, 2014 provide as follows: 53. Assets and liabilities of State undertakings:- (1) The assets and liabilities relating to any commercial or industrial undertaking of the existing State of Andhra Pradesh, where such undertaking or part thereof is exclusively located in, or its operations are confined to, a local area, shall pass to the State in which that area is included on t....