TaxTMI 
TaxTMI 
2025 (10) TMI 1125
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....t writ-petition preferred under Article 226 of the Constitution of India, the petitioner seeks prayer and directions to respondent authorities to lift and withdraw the attachment created by respondent No. 5 (hereinafter referred to as 'the respondent' for short) under the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as 'the Act') on property at regular Survey No. 31, Village: Trajpar, Taluka & District: Morbi (hereinafter referred to as 'the property' for short) owned by the petitioner. 5. The brief facts of the case are as under: 5.1. The property was purchased by Shri Dharamshi Nandlal Patel (HUF) (hereinafter referred to as 'the HUF" for short) vide registered sale deed dated 26.2.1998. Subsequent to acquiring of the property, the HUF leased the property to one M/s. Radiant Floor Tiles Private Ltd., on annual lease of Rs. 50,000/- from 31.1.2004 for a period of 30 years. The Company to whom the lease was granted, was a dealer as specified under the provisions of the Act. Initially the Karta of the HUF of the property herein were Directors of the Company. Thereafter, the name of the Company was changed from Radiant Floor Tiles Pvt. Ltd. to Laurent Tiles ....
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....Company is wholly without jurisdiction, bad and illegal. The land in question never belonged to the Company and was of the ownership of the HUF and thus no charge can be created over such land in question and such land cannot be attached. 6.1 Learned advocate Mr. Trivedi has further submitted that the Company and its Directors being separate legal entities, the liability of the Company to pay VAT cannot be fastened on the Directors personally or on the personal properties of the Directors, in absence of any provision to that effect under the VAT Act. 6.2 Learned advocate Mr. Trivedi for the petitioner further submitted that from the scheme of the VAT Act, it is clear that it is only the property of defaulting dealer which can be attached under sections 45, 46 and for garnishee notice for the purpose of section 44 to the persons who owes certain money to dealer and not any other person except for dealer. 6.3 Learned advocate Mr. Trivedi further submitted that levy and collection of tax must be with the authority of law by virtue of Article 265 of the Constitution and in absence of any determinative provisions under the Sales Tax Act, 1969 for enabling recovery in the hands ....
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....is also Karta of the HUF whose dues are pending under the provisions of Act. Therefore, indirectly they are related to the dues of the Company itself. It was further submitted that the Company was indirectly managed and controlled by the members of the HUF and the Company has defaulted in making payment of the dues under the Act. The total dues of the Company are as under: Sr. Dealer Type Tax Period Status Originated from Amount as per AO in Rs. Order Served Date Arrear in Rs. Payment Recd in Rs. 1. CST 01-April-2006-31 Mar 2007 Closed Refund After Recovery 16,16,5 09.00 14/03/2011 0.00 18,82,853 2. VAT 01-April-2007-31 Mar 2008 Stay Order 31.03.2012 Reassessment 80,62,412.00 31/03/2012 2,35,64,773.62 0.00 3. CST 01-April-2007-31 Mar 2008 Stay Order 31.03.2012 Reassessment 18,03,0188.00 31/03/2012 5,15,05,450.69 1,48,626 4. CST 01-April-2008-31 Mar 2009 Stay Order 09.05.2013 Audit Assessment 15147241.00 09/05/2013 3,97,17,095.24 15,00,000 5. VAT 01-April-2009-31 Mar 2010 Sine Die Adjourn ed without stay Audit Assessment 5124.00 ....
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....ority, a company, a partnership firm, a Hindu Undivided Family or any society, club, association or body, incorporated or not, of persons which carries on business; (b) a casual dealer, that is to say, a person who whether as principal, agent or in any other capacity, undertakes occasional transaction of a business nature in any exhibition-cum-sale or auction or otherwise in the State, whether for cash, deferred payment, commission, remuneration or other valuable consideration; (c) an auctioneer, who sells or auctions goods belonging to any principal whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of principal; (d) a factor, broker, commission agent, del credere agent or an auctioneer or any mercantile agent, by whatever name called, who carries on business on behalf of any principal whether disclosed or not; (e) any person who transfers, otherwise than in pursuance of a contract, property in any goods for cash, deferred payment or other valuable consideration; (f) any person who transfers property in goods (whether as goods or in some other form) involved in t....
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....n performance of its functions, for achieving its avowed objects, which are not in the nature of business." 15. The word "person" is defined in clause (15) of the Act, 2003. The same reads as under; "(15) "person" includes an individual, a joint family or Hindu Undivided Family, a company, a firm, an association of persons or body of individuals, whether incorporated or not, a society, club or other institution, a local authority, the Central Government or a State Government and every artificial juridical person not falling within any of the preceding descriptions;" 16. Section 42 of the Act, 2003 provides for the payment and recovery of tax and interest on delayed payment. The same reads thus:- "42. Payment and recovery of tax and interest on delayed payment. (1) The amount of tax assessed, reassessed or becoming payable for any period under section 32, 33, 34, 35, 75 or 79, less any amount already paid by the dealer in respect of such period, shall together with penalty and interest if any that may become payable under any of the provisions of this Act, be paid by the dealer or the person liable therefor into a Government treasury or i....
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....ng unpaid during such period : Provided that where security, other than in the form of surety bond, has been furnished by a dealer under subsections (1) and (2) of section 28, the Commissioner may, for good and sufficient reasons to be recorded in writing, realise any amount of tax, penalty or interest remaining unpaid as aforesaid or part thereof by ordering forfeiture of the whole or any part of the security." 17. Section 44 of the Act, 2003 provides for the special mode of recovery. The same reads as follows; "44. Special mode of recovery:- (1) Notwithstanding anything contained in any law or contract to the contrary, the Commissioner may, at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the dealer at his last known address, require,-- (a) any person from whom any amount of monies is due, or may become due, to a dealer on whom notice has been served under sub-section (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....
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....ds as follows; "45.Provisional attachment:- 1) Where during the pendency of any proceedings of 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 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)." 19. Section 46 is with respect to the special powers of the tax authorities for recovery of tax as arrears of land revenue. "46. Special powers of tax authorities for recovery of tax as arrears of land revenue. (1) For the purpose of effecting recovery of the amount of tax, penalty or interest due from any dealer or other person by or under the provisions of this Act or under any earlier law, as arrears of land revenue - (i) the Commissioner, the Special Commissioner, Additional Commissioner and the Joint Commissioners shall have and exercise all the power....
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....s arrears of land revenue. 23. To our understanding, more particularly, having regard to the scheme of the Act, 2003, Section 46 would come into play once the liability is assessed and final order is passed in that regard. For the purpose of effecting recovery of the amount of tax, penalty or interest as may be assessed by the authority, the Special Commissioner, Additional Commissioner and the Joint Commissioners under the Act, 2003 have been conferred with all the powers of the Collector under the Bombay Land Revenue Code. Thus, to put it simply, once the liability of the defaulting dealer is assessed and fixed, the next step would be to recover the requisite amount with penalty or interest. Such amount can be recovered by the authorities under the Act, 2003 by way of land revenue measures as provided under the Bombay Land Revenue Code. 24. From the aforesaid, two things are very amply clear. The property of the ownership of the defaulting dealer can only be provisionally attached. The language of the statute is very clear. Section 45 provides that "he may by order in writing attach provisionally any property belonging to the dealer". In such circumstances, in t....
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....r aspect of the matter is that the expression 'dealer' has been defined under section 2(10) of the Act to mean any person who, for the purpose of or consequential to his engagement in or, in connection with or incidental to or in the course of his business buys, sells, manufactures, makes supplies or distributes goods for cash or for commission, remuneration or otherwise, which means any person who satisfies the requirement of that sub-section. Sub-section (15) of section 2 of the GVAT Act defines person' to include an individual, a joint family or Hindu Undivided Family, etc. Therefore, the Act recognises a Hindu Undivided Family as a dealer and as a person. The legislature having treated a Hindu Undivided Family as a taxable entity, distinct from the individual members constituting it, it was not open for the appellant to attach the movable properties of an individual member. In this regard, reference may be made to the decision of the Supreme Court in the case of Kapurchand Shrimal v. Tax Recovery Officer, Hyderabad & Ors., AIR 1969 SC 682, wherein the court has held as under: "5. The scheme of the Income-tax Act, 1961, is to treat the assessee failing to pa....
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....alone.The manager by virtue of his status is competent to represent the Hindu undivided family, but on that account he cannot for the purpose of Section 222 of the Act of 1961 be deemed to be the assessee when the assessment is made against the Hindu undivided family and certificate for recovery is issued against the family." 9. Having regard to the principles enunciated in the above decision as well as in the light of the above discussion, this court is of the view that the Tribunal was wholly justified in holding that the property of the individual member of the Hindu Undivided Family could not be attached under section 45 of the GVAT Act. The impugned order passed by the Tribunal does not suffer from any legal infirmity so as to give rise to any question of law, much less a substantial question of law, warranting interference. The appeal, therefore, fails and is accordingly dismissed. 10. It may also be noted that the initial attachment order was for a period of six months. The learned Assistant Government Pleader has stated under instructions that the attachment has not been extended thereafter and hence, the attachment is no longer effective. 28. The....
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....hall be forwarded to the dealer at his last known address, require,-- (a) any person from whom any amount of monies is due, or may become due, to a dealer on whom notice has been served under sub-section (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 therefrom 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 ....