TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 765
X X X X Extracts X X X X
X X X X Extracts X X X X
....titioner herein had purchased a portion of a property bearing House No. 41-1/4-42A, Dwarakanagar, Krishna Lanka, Vijayawada from the 5th respondent in the year 2000, by way of a registered deed of sale, for a sum of Rs.3.51 lakhs. Out of this amount, a sum of Rs. 2 lakhs is said to have been paid to a Finance Company to redeem the mortgage of the property and the balance amount was paid to the 5th respondent. It may also be mentioned that the 5th respondent is the father-in-law of the petitioner. 3. The 1st respondent, by proceedings dated 14.09.2007, under Section 17-A of APGST Act read with Section 80 of the APGST Act had declared the purchase of the aforesaid property, by the petitioner, as void on the ground that the said transaction h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unsel for the petitioner assails the said proceeding of the 1st respondent dated 14.09.2007 on the following grounds: 1) Section 17-A of the Andhra Pradesh General Sales Tax Act, 1957 does not specify the authority who can exercise the power set out under that provision. The 1st respondent, cannot arrogate such power to himself and pass the impugned proceeding. The said proceeding is without jurisdiction; 2) The sale of the property had taken place in the year 2000 and the proceeding, declaring such sale void, was passed on 14.09.2007, that is 7 years after the sale. Though, no period of limitation has been prescribed for exercise of such power, the inordinate delay of seven years clearly bars such exercise of power; 3) The provision ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Commercial Tax Officer (Fac), Vijayawada and Ors (2005) 142 STC page 515 had held that Section 17-A of APGST Act, 1957 can be invoked by the department only when the department is able to show that the transfer was made to defraud the revenue and thereafter the burden shifts to the petitioner to show it is a bonafide transaction. The 1st respondent, in the impugned proceedings, has not placed any material to show that there is a basis to say that the transfer was to defraud the revenue. 7. The learned Government Pleader for Commercial Taxes, on the other hand, would contend that the petitioner is no other than the son-in-law of the 5th respondent and was fully aware of the difficulties of the 6th respondent in paying its taxes and other ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of sale, mortgage, gift, exchange or any other mode of transfer whatsoever of any of his assets in favour of any other person, with the intention to defraud the revenue, such charge or transfer shall be void as against any claim in respect of any tax, or any other sum payable by the dealer as a result of the completion of the said proceeding or otherwise: Provided that, such charge or transfer shall not be void if it is made - (i) for adequate consideration and without notice of the pendency of such proceeding under this Act or, as the case may be, without notice of such tax or other sum payable by the dealer; or (ii) with the previous permission of the assessing authority. 10. The provisions of Section 17-A, provide the commercial....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orders under Section 17-A were passed. Upon challenge, a Division Bench of the erstwhile High Court took the view that the initial burden to show that the property was sold to defraud revenue and avoid payment of tax falls on the sales tax authorities. Upon such onus being discharged, the burden would fall on the purchaser to show that they were bona fide purchasers who have paid adequate consideration for the purchase. On the facts in that case, the Division bench came to the conclusion that the purchasers were bona fide purchasers and quashed the proceedings under Section 17-A of the APGST Act. 12. In the present case, the facts are different. The petitioner is no other than the son-in-law of the 5th respondent and the assertion of the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... opportunity to demonstrate that non-payment of tax by the Private Limited Company was not on account of his negligence, misfeasance or breach of duty and after rejecting any such representation by the Director, that the tax authority can recover the tax dues of the liquidated private company from its Directors. 15. In the present case, though the company is admitted to be in liquidation, no steps have been taken against the 5th respondent by issuance of a notice calling upon him to pay the tax dues of the 6th respondent Private Limited Company nor was the 5th respondent given an opportunity of hearing to demonstrate that there was no liability to pay such taxes. In the absence of such an opportunity being given to the 5th respondent, tax ....