AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 520
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....laring that, petitioner has first charge over the movable goods i.e. cotton bales as mentioned in receipt dated 13.04.2011 issued by respondent No.2 in accordance with Section 48 of Gujarat Cooperative Societies Act, 1961 and further be pleased to declare that, respondent No.1 Commissioner has no statutory right whatsoever to attach movable goods as mentioned in receipt dated 13.04.2011 issued by respondent No.2; D. Issue writ of mandamus and/or any other appropriate writ, order or direction restraining respondent No.2 from stopping or denying petitioner taking possession of the movable goods as mentioned in receipt dated 13.04.2011 issued by respondent No.2 and from restraining the petitioner from exercising it's statutory rights and powers enshrined under SERFAESI Act in pursuance of the banking business of the petitioner bank; E. Pending admission hearing and final disposal of present petition, this Hon'ble Court may be pleased to stay the execution, operation and implementation of the impugned notice dated 07.05.2012 and 11.05.2012 under section 44 of VAT Act issued by respondent No.1 to petitioner; D. This Hon'ble Court may be further pleased to pass....
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....harge and the VAT department cannot claim priority of its dues. On the other hand case of the Government is that in terms of provisions contained in the Gujarat Value Added Tax Act, 2003, tax dues of the Government would enjoy priority over other secured debtors. Issue would require consideration, hence, Rule. Learned AGP Shri Jaimin Gandhi waived service of rule on behalf of respondent no.1. Learned counsel Shri P.J. Kanabar waived service of rule on behalf of respondent no.2 Gujarat State Ware-Housing Corporation. Counsel for the petitioner however, submitted that the cotton bales if not disposed of within a reasonable period, the quality would deteriorate and ultimately, would fetch lesser price in the market whenever sold. He therefore, requested that such cotton bales be sold through public auction. He in fact also offered that such auction may even be held by the Government, but proceeds thereof may not be appropriated towards the tax dues to respondent no.3. Learned AGP Shri Gandhi stated under instructions that if the reasonable period of about 90 days is given, it would be open for respondent no.1 to conduct such an auction. Learned counsel Shri Kananbar for the W....
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.... of the provisions of Section 48 of the Gujarat Co-operative Societies Act, 1961. He further submitted that the petitioner is a lender and the respondent No.3 is a borrower of the loan amount and therefore, respondent No.1 could not have issued notice invoking the special mode of recovery, as provided under Section 44 of the VAT Act for recovery of the dues of the respondent No.3, from the petitioner. 7. It was therefore, submitted that as per the hypothecation agreement, executed between the petitioner and the respondent No.3, 200 cotton bales were hypothecated with the petitioner-bank and therefore, the amount, which is received by way of an auction, pursuant to the order passed by this Court, is required to be paid to the petitioner. 8. On the other hand, the learned Assistant Government Pleader Mr. Soham Joshi relying upon the affidavit-in-reply, filed by the respondent No.1 submitted that as per the provisions of Section 48 of the Gujarat Co-operative Societies Act, 1961, the government is a prior claimant then that of petitioner- bank. He further submitted that the Section 48 of the VAT Act provides that notwithstanding anything to the contrary contained in any law for ....
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.... assessment or reassessment of turnover escaping assessment the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may by order in writing attach provisionally any property belonging to the dealer in such a manner as may be prescribed. (2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1). Section 48: Notwithstanding anything to the contrary contained in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer, or as the case may be, such person." 12. On perusal of the aforesaid provisions of the VAT Act, it is clear that the petitioner is not holding any money of the respondent No.3, who is a borrower of the petitioner and therefore, the respondent No.1 could not have issued the notice by invoking the provisions of Section 44(1)(b) of the VAT Act. 13. With regard to the contentions of the learned Assi....
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....2. The language of Section 48 of the VAT Act is plain and simple and the phrase 'any amount payable by a dealer or any other person on account of tax, interest or penalty' therein assumes significance. The amount could be said to be payable by a dealer on account of tax, interest or penalty once the same is assessed in the assessment proceedings and the amount is determined accordingly by the authority concerned. Without any assessment proceedings, the amount cannot be determined, and if the amount is yet to be determined, then prior to such determination there cannot be any application of Section 48 of the VAT Act. We may also refer to Section 47 of the VAT Act. Section 47 of the VAT Act is with respect to transfer of property by the dealer to defraud the Revenue. According to Section 47, if a dealer creates a charge over his property by way of sale, mortgage, exchange or any other mode of transfer after the tax has become due, then such transfer would be a void transfer. The reason why we are referring to Section 47 is that the phrase therein 'after any tax has become due from him' assumes significance. The same is suggestive of the fact that before the assessment proceedings, or....