TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 892
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....ue appropriate writ, order or direction, calling for the papers and proceedings leading to the issuing the application dated March, 2013 issued by respondent No.2 (Annexure "G") and after looking into the same and the legality thereof this Hon'ble Court be pleased to quash and set aside the said application. (C) Your Lordships may be pleased to issue appropriate writ, order or direction, directing respondent No.3 to delete the entry if any made in revenue records pursuant to the application dated March, 2013 made by respondent No.2 (Annexure "G"); (D) Pending the hearing and final disposal of the writ petition, the respondents by themselves, their servants and agents be restrained by an order and injunction of this Hon'ble High Court, directing respondents to forthwith refrain from initiating any steps against the petitioners or other properties for the recovery of the outstanding dues of respondent No.4 and pass such order(s) as is deemed fit, just, proper and expedient in the circumstances of the case; (E) Any other further reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case." 2. The facts giving rise to this writ application ....
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....ver the property which is owned by the father of the registered dealer. To put it in other words, whether the department can proceed against the property which is owned by the father of the registered dealer so as to recover the so-called dues of the registered dealer. 8. This litigation could have been easily avoided, but for the sheer ignorance of law on the part of the Tax Officer and the entire department of VAT. We are at pains to understand as to on what basis the department wants to proceed against the property owned by the father of a registered dealer. Which is that provision of law under the Act, 2003 which empowers the department to proceed against the property owned by the father. 9. Section 48 of the Act, 2003 provides that the tax shall be the first charge on property. It reads thus: "48. Tax to be first charge on property. - 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." 10. The plain reading....
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.... is due, or may become due, to dealer on whom notice has been served under subsection (1), or (b) any person who holds or may subsequently hold monies for or on account of such dealer, to pay to the Commissioner, either forthwith upon the monies becoming due or being held or within the time specified in the notice (but not before the monies becomes due or is held as aforesaid) so much of the monies as is sufficient to pay the amount due by the dealer in respect of the arrears of tax, penalty or interest under this Act, or the whole of the money when it is equal to or less than that amount. Explanation. - For the purposes of this sub-section, the amount of monies due to a dealer from, or monies held for or on account of a dealer by any person, shall be calculated by the Commissioner after deducting therefore such claims, if any, lawfully subsisting, as may have fallen due for payment by such dealer to such person. (2) The Commissioner may amend or revoke any such notice or extend the time for making any payment in pursuance of the notice. (3) Any person making any payment in compliance with a notice under this section shall be deemed to have made the payment under the author....
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.... every artificial juridical person not falling within any of the preceding descriptions;" 17. Section 20 of the Act, 2003 defines the term "registered dealer". It reads thus: "Registered dealer" means a dealer registered under the provisions of this Act, who holds a certificate of registration granted or deemed to have been granted under this Act;" 18. We have heard Mr. Bharat Naik, the learned Senior Counsel assisted by Mr. Pratik Jasani, the learned counsel appearing for the writ applicants and Mr. Utkarsh Sharma, the learned A.G.P. appearing for the State respondents. 19. It is by now well settled that the department can proceed only against the registered dealer. If it wants to recover the dues due and payable by the dealer, the department cannot proceed to attach any property of any individual or any of the family members of the dealer for the purpose of recovering the dues of the dealer. 20. In the aforesaid context, we may refer to the decision of the Supreme Court in the case of Kapurchand Shrimal vs. Tax Recovery Officer, Hyderabad and others [AIR 1969 SC 682], wherein the Supreme Court has held as under: "5. The scheme of the Income-tax Act, 1961, is to treat the ....