TaxTMI 
TaxTMI 
2019 (8) TMI 1290
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....018-2019 (hereinafter 'impugned order' for brevity) provisionally attaching said property to secure for what according to the impugned order is arrears of tax and penalty to the tune of over 11.72 Crores (Rs. 11,72,51,886/- to be precise) under 'Pondicherry General Sales Tax Act' ('PGST Act) and 'Pondicherry Value Added Tax Act' ('PVAT Act' for brevity). 3. According to the impugned order, this arrears of tax and penalty under PGST and PVAT Acts are dues of a dealer in petroleum products being Sri Manakula Vinayagar Petro Agency with 'Tax Identification Number' ('TIN' for brevity) 34070001928. A reading of the impugned order also reveals that Sri Manakula Vinayagar Petroleum Agency is a proprietary concern and Tmt.D.Indira (petitioner's aforementioned vendor D.Sundar's mother) is the sole proprietrix. 4.Instant writ petition has been filed by D.Sundar's vendee who purchased said property under aforementioned registered Sale Deed dated 03.07.2017. Challenge to the impugned order, as can be culled out from the averments /grounds /contentions in the affidavit filed in support of the writ petition has been capture....
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.... and Rule 31(1) of 'The Puducherry Value Added Rules 2007' ('PVAT Rules' for brevity), learned counsel for writ petitioner submitted that attachment if any, can only be for liability of a 'dealer' within the meaning of PVAT Act. It was submitted by learned counsel for writ petitioner that writ petitioner's vendor is not a dealer and even according to 'impugned order', the dealer is one Tmt.D.Indira and she has been carrying on business as a sole Proprietrix in the name and style 'Manakula Vinayagar Petro Agency, Pudhcuerry' (to be noted Tmt.D.Indira is mother of vendor Mr.D.Sundar). 9. By way of preliminary submissions, learned AGP, drawing the attention of this Court to Section 37 of PVAT Act submitted that tax liability under the said Act i.e., PVAT Act, becomes first charge on the property of the dealer, on 21 days elapsing from the date on which notice of tax assessment is served on the dealer. 10. This takes us to the question as to whether the vendor of writ petitioner can be described as a dealer under PVAT Act. 11. To be noted, the term 'dealer' is a term of art qua PVAT Act as it has been define....
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....ents submitted that writ petitioner's vendor does qualify as a dealer within the meaning of PVAT Act as he was undoubtedly carrying on aforesaid business i.e., day-to-day affairs of 'Sri Manakula Vinayagar Petro Agency'. To be noted, learned State counsel has filed a detailed counter affidavit dated 11.07.2019 and also typed-set of papers along with the same. 7. Learned State counsel first drew the attention of this Court to Section 37 of PVAT Act and submitted that in the instant case on 21 days elapsing from the date of assessment under PVAT Act, the outstanding amount i.e., arrears of tax becomes a first charge on said property. For the purpose of convenience and clarity, this Court deems it appropriate to extract subsections (1) and (2) of Section 37 and provisos thereto, which reads as follows: '37.Payment and recovery of tax__(1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any and within such time as may be specified in the notice of assessment, not being less than twenty-one days from the date of service of the notice. If default is made in paying according to the notice of assessment, the whole of the ....
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....r any other mercantile agent, by whatever name called and whether of the same description as hereinbefore or not, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal; (iv) every local branch of a firm or company or association situated outside the Union Territory and a non-resident dealer or an agent of a non-resident dealer; (v) a person who sells goods produced by him by manufacture or otherwise; (vi) a person engaged in the business of transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (vii) a person engaged in the business of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (viii) a person engaged in the business of delivery of goods on hire-purchase or any system of payment by instalments; (ix) a person engaged in the business of transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (x) a person engaged in th....
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....meaning of PVAT Act is learned State Counsel's say. 12. Reacting to this, learned Senior counsel submitted that expression 'or otherwise' occurring in Section 2(n) qualifies the activities of business enumerated therein, namely 'buying, selling, suppling or distributing'. In other words, it is the specific submission of learned senior counsel that the expression 'or otherwise' does not qualify how the business was carried on, but it qualifies the list of four business activities enumerated in Section 2(n). Elaborating his submission in this direction, it was also submitted by learned senior counsel that 'any person' occurring in Section 2(n) is fixed i.e., writ petitioner's vendor's mother and it makes no difference as to whether she was carrying on business directly or otherwise i.e., through her son. It was submitted by way of illustration that it may even be a manager or cashier in the petroleum dealership outlet. 13. Per contra, learned State counsel submitted that 'any person' occurring in Section 2(n) is not fixed as there is copious material to show that writ petitioner's vendor was only carrying on day-to-day ....
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....considered the rival submissions and this Court now embarks upon the exercise of answering the aforementioned questions that have arisen before this Court. As alluded to supra, two micro questions have arisen from the lone issue /question in the instant case. One is with regard to the expression 'any dealer' occurring in Section 2(n) of PVAT Act and the other is expression 'or otherwise' occurring in Section 2(n) of PVAT Act. 19. With regard to 'any person' occurring in Section 2(n), in the considered view of this Court, the legislature in its wisdom has chosen to say 'any person' and not 'a person'. Therefore, intention was to take within its sweep different kinds of persons. In this view of the matter, this Court is unable to accept the submission that 'any person' is static and that it can refer only to writ petitioner's vendor's mother in this case. Another reason as to why this Court is unable to accept this contention is, PVAT Act does not stop with defining 'dealer'. It defines 'registered dealer' also. To be noted, 'registered dealer' is defined in Section 2(zc) of PVAT Act. Section 2(zc), wh....
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....e is a Constitutional Bench judgment and therefore, besides being a binding ratio of Hon'ble Supreme Court, in the considered view of this court it is a determination of law when it comes to interpreting the term 'or otherwise'. As mentioned supra, Hon'ble Constitution Bench in Lila Vati Bai case interpreted the same expression 'or otherwise' occurring in Explanation (a) to Section 6 of Bombay Land Requisition Act, 1948. Portions of Section 6 of said Act including Explanation (a) as extracted in the copy of Lila Vati Bai judgment placed before this Court reads as follows: '6.(1) If any premises situate in ail area specified by the State Government by notification in the Official Gazette, are vacant on the date of such notification and wherever any such premises are vacant or become vacant after such date by reason of the landlord, the tenant or the sub-tenant, as the case may be, ceasing to occupy the premises or by reason of the release of the premises from requisition or by reason of the premises being newly erected or reconstructed or for any other reason the landlord of such premises shall give intimation thereof in the prescribed form to....
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....pecific words of same nature, but when the context in which the general words are used is intended to eliminate a mischief, these general words will be given their plain and ordinary meaning. 25. To be noted, this is the approach taken by Hon'ble Supreme Court in Lila Vati Bai case and this approach has in turn been adopted by Hon'ble Supreme Court by placing reliance on the celebrated Skinner & Co. V. Shew and Co. reported in (1893) 1 Ch 413 (K) where the words 'or otherwise' used in Section 32 of the erstwhile Patents, Designs and Trade Marks Act, 1883 in England were interpreted in Skinner & Co. case. 26. In the instant case, with regard to generic words 'or otherwise' which we are concerned with, this Court has no hesitation in holding that Lila Vati Bai principle, being a Constitutional Bench judgment of Hon'ble Supreme Court, can be applied as these generic words used in Explanation (a) to Section 6 of Bombay Land Requisition Act and Section 2 (n) of PVAT Act are not different. It is nobody's case that deployment of these generic words are different in Explanation (a) to Section 6 of said Act and Section 2(n) of PVAT Act. 27. This take....
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....y 'directly', even if ejusdem generis principle is applied, it would at best read directly or indirectly. Even if 'directly or otherwise' is read as 'directly or indirectly', it would only mean 'any person' who carries on any or some of the kinds of business activities enumerated in Section 2(n) directly or indirectly. In the instant case, it is the case of writ petitioner's vendor's mother carrying on three of the business activities, namely buying, selling and distributing petroleum products indirectly through her son. 31. Therefore, this Court having come to the conclusion that writ petitioner is carrying on business as a dealer not directly, but otherwise, even on an extreme demurrer, even if the expression 'or otherwise' is to be given a restricted meaning, it will still cover writ petitioner's vendor. As already alluded to supra, this is because the term 'registered dealer' has been defined separately and writ petitioner's vendor's mother will qualify as 'registered dealer'. This Court is of the considered view that the width given to the term 'dealer' while defining the same is to eliminat....
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....herefore this Court deems it appropriate to not to delve into the same any further. 36. It is thus the end of the campaign of the writ petitioner in the instant writ petition as far as writ petitioner's challenge to the impugned order is concerned. However, this Court, before parting with this case, considers it appropriate to deal with two aspects of the matter. One aspect of the matter is, nothing prevents the writ petitioner from proceeding against his vendor for having palmed off a property, which was subject matter of first charge under Section 37(1) of TNVAT Act. There is no material placed before this Court to demonstrate that writ petitioner has issued any notice or initiated any proceedings against his vendor. If the writ petitioner now chooses to proceed against his vendor, this order will not impede such proceedings. 37. One other aspect of the matter is regarding communication to the jurisdictional Registrar's office about first charge on properties of a dealer when the same occurs under Section 37(1) of PVAT Act. Learned State counsel submits that as of now, there is no procedure to communicate such a charge when it occurs. This Court deems it pertinent t....