TaxTMI 
TaxTMI 
2006 (2) TMI 66
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..... 4. The petitioner is a company carrying on the business of manufacturing leather cloth. One M/s A. Arti Leathers (hereinafter referred to as "the erstwhile unit") was carrying on the business of manufacturing leather cloth at the premises which are presently occupied and used by the petitioners. The said company had availed of a term loan from the Gujarat State Financial Corporation (GSFC) and had mortgaged its immovable property and hypothecated its movable plant and machinery to the GSFC to secure the said loan. Thus, the assets of the erstwhile unit comprised of land and building along with plant and machinery. The said unit having defaulted in payment of its dues, the GSFC put up its assets for auction. The petitioner being the highest bidder, its offer was accepted and the assets of the erstwhile unit were transferred in favour of the petitioner by the GSFC in the exercise of powers under Section 29 of the State Financial Corporation Act, 1951. Accordingly, necessary agreement was executed between the petitioner and the GSFC on 2nd March, 1995 and the possession was handed over to the petitioner on 4th March, 1995. 5. It is the case of the petitioners that the petitioners ....
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....ken by the respondents was well within the period of limitation as show cause notice had been issued within the prescribed time limit, and that ever since the dues were confirmed, the respondents have been pursuing the recovery thereof before various forums. That there is nothing in the language employed in the amended provisions of section 11 to indicate that the same is applicable only to transfers effected after the insertion of the said provision. That no period of limitation has been prescribed for taking action under the provisions of the proviso to section 11, hence, there was no bar of limitation insofar as the action sought to be taken by the respondents is concerned. That, by the impugned communication dated 10/12/2004, the petitioners had been called upon to pay the dues of the erstwhile unit, however, no coercive action had been taken. That the petitioners had been given sufficient opportunity to put forth their views, hence, there is no breach of the principles of natural justice. 9. In the second affidavit, it has been stated that the respondent had lodged its claim in respect of the dues of the erstwhile unit with the official liquidator, hence, the department was n....
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.... statute does not prescribe a period of limitation, action must be taken within a reasonable time. That a period of ten years can, by no stretch of imagination, be said to be a reasonable time. (6) That, from a perusal of the impugned communication, it is evident that the substantial portion of demand in question relates to amounts which had become due after the transfer of the unit, namely, after the first week of March 1995. That the demand to the extent of Rs.58,12,251/- was confirmed only on 16/10/2001 and the demand for Rs.61,920/- was in relation to an order dated 31st March, 1995. Thus, both the demands are evidently in relation to orders made after the date of transfer. That the proviso to section 11 of the Act contemplates the recovery of sums due at the time of the transfer of the assets of the predecessor unit and not to amounts which had become due subsequently. (7) That the penalty component of the demand in question was Rs.27,91,000/-. That, insofar as the recovery of dues towards penalty were concerned, the Apex Court in the very case sought to be relied upon by the respondents, that is, Macson Marbles Pvt. Ltd. (supra), has held as follows: "It is difficu....
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....ner which inheres the concept of its exercise within a reasonable time. 15. The Apex Court, in the case of Ibrahimpatnam Taluk Vyavasaya Coolie Sangham v. K. Suresh Reddy, [2003] 7 SCC 667, in the context of exercise of suo motu powers, has laid down as follows: "Exercise of suo motu power "at any time" only means that no specific period such as days, months or years are not prescribed reckoning from a particular date. But that does to mean that "at any time" should be unguided and arbitrary. In this view, "at any time" must be understood as within a reasonable time depending on the facts and circumstances of each case in the absence of prescribed period of limitation." 16. This Court, by a decision rendered on 16th December 2005, in the case of ANI Elastic Industries v. Union of India, Special Civil Application No.20528 of 2005, wherein a similar issue was involved, has held as follows : "It is a settled legal position that when a power is conferred by a statute without mentioning the period within which it could be invoked, the same has to be done within a reasonable period, as all powers must be exercised reasonably, and exercise of the same within a reasonable period would....