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Gujarat High Court · body

2020 DIGILAW 198 (GUJ)

GE India Industrial Pvt Ltd v. State of Gujarat

2020-01-30

BHARGAV D.KARIA, J.B.PARDIWALA

body2020
ORDER : J.B.PARDIWALA, J. 1. Leave to amend the prayer clause. 2. Rule returnable forthwith. Mr. Chintan Dave, the learned A.G.P. waives service of notice of rule for and on behalf of the respondents Nos.1, 2 and 3 and Mr. Maulik Nanavati, the learned counsel waives service of notice of rule for and on behalf of the respondents Nos.4 and 5. 3. By this writ application under Article 226 of the Constitution of India, the writ applicant, a company incorporated under the Companies Act, 1956 and engaged in the business of manufacturing electrical goods and products in the State of Gujarat, has prayed for the following reliefs: “(A) Your Lordships may be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction, calling for the record of the Petitioner’s case and after examining its legality and validity quash and set aside the Notice dated 18.01.2012 (2007-08) & 02.02.2012 (2001-02 & 02-2-2012) (2006-07) and all consequent proceedings and O\orders whereby the property/land of the Petitioner has been attached; (B) YOUR LORDSHIPS may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, directing the Respondents to immediately revoke the attachment and to remove the charge of the sales tax department on the land/property bearing Survey No. 3341/1/2/3/4/5, 3346/1/4, 3126, 3127, 3335, 3336/1/2/3, 3121, 3122, 3223, 3124, 3342 & 3343; (C) YOUR LORDSHIPS may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, directing the Respondent No. 4/5 to immediately grant compensation to the Petitioner With applicable interest; (D) YOUR LORDSHIPS may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, directing the Respondent No. 2 to direct the appropriate authority to dispose the appeal of the petitioner filed for year 2000-01 expeditently. (E) Pass any such other and/or further order that may be thought just and proper, in the facts and circumstances of the present case.” 4. (E) Pass any such other and/or further order that may be thought just and proper, in the facts and circumstances of the present case.” 4. The case of the writ applicant, as pleaded in the writ application, is as under: “(3.1) On 09.06.1991, the Petitioner sets up a Lighting Division Unit (hereinafter referred to as “LD Unit”) at Limbasi for assembly of Electric Bulbs, Lamps and Tubes and gets itself registered with the erstwhile sales tax department and was allotted Registration No. 21505595. This unit was established under the Scheme and accordingly Petitioner was granted exemption from payment of sales tax on its output under Entry 255 of the notification issued under Section 49(2) of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as “GST Act”). The sales tax exemption granted to the LD unit expired in 09.03.2002. (3.2) In 1994, the Petitioner, in the same premises where the LD Unit was operating, commenced another manufacturing unit referred to as the Ribbon Unit which was for the manufacture of Glass Shells. This Unit was in the nature of backward integration of the existing LD Unit. This unit was also registered with the Sales Tax Department with the same registration number as that of the LD Unit. The sales tax exemption granted to the Ribbon Unit was expired in 29.03.2004. (3.3) As both the units of the Petitioner was operating as an integrated unit for manufacture of Glass shells and the lighting plant for assembly of electric bulbs, lamps and tubes; the Petitioner was filing a single consolidated return and was claiming exemption under Entry 255 of the notification issued under Section 49(2) of the GST Act. It is pertinent to note here that all the assessments upto the year 1999-2000 were finalized and exemption was allowed to the Petitioner. (3.4) The Respondent No. 3 issued show cause notices in March 2004 alleging that the Petitioner is not eligible to avail the sales tax incentive granted to it under Entry 255 of the notification issued under Section 49(2) of the GST Act, as the Petitioner had not maintained separate accounts of the LD Unit and the Ribbon Unit and consequently called for repayment of the exemption availed by the Petitioner between 1992 to 2004. (3.5) The petitioner filed representation 29.08.2006, 30.09.2006 & 14.12.2006 before the Chief Secretary of the State of Gujarat requesting to allow sales tax exemption to the Petitioner for its Units. Pursuant to the representation of the Petitioner, the Respondent No. 2 directed the Respondent No. 3 to allow exemption to the Petitioner vide its letter dated 29.08.2006. (3.6) For the year 2000 01, the Respondent No. 3 denied the sales tax exemption to the Petitioner on the ground that the Petitioner has breached the exemption conditions by not maintaining the separate records and by not filing separate returns in lieu of LD & RD. This Assessment Order dated 31.03.2005 was passed before the direction of the Respondent No. 2 to grant exemption to the Petitioner. The assessment order had imposed a tax liability on the Petitioner for Rs.11,00,70,040/-. As the assessing authority has mistakenly added the amount of stock transfer while calculating the tax liability of the Petitioner, a rectification application was moved by the Petitioner and consequently the tax liability of Rs.11,00,70,040/- was reduced to Rs.5,57,07,425/-. Further, Petitioner filed appeals against the assessment order for the year 2000-01 which is still pending. (3.7) At the time of filing the appeal the Petitioner deposited an amount of Rs.51,28,874/-and submitted a Bank Guarantee of Rs.5,05,78,551/- as a result of which a stay was granted by Joint Commissioner, Sales Tax, Appeals II. Thereafter, the appellate authority never direct the Petitioner to renew the bank guarantee. (3.8) The assessing authority passed assessment orders by allowing the sales tax exemption to the Petitioner for the years 1992 to 2003-04 [except for the year 2000-01 where the appeal is pending] and there is no tax liability in any of these assessment years. (3.9) The Respondent No. 3 passed the Assessment Order for the year 2001-02, 2006-07 & 2007-08 by allowing, wherever applicable, the exemption claimed by the Petitioner under Entry 255 of the notification issued under Section 49(2) of the GST Act. However, certain tax liabilities were fastened on the petitioner on separate issues not related to the exemption. (3.9) The Respondent No. 3 passed the Assessment Order for the year 2001-02, 2006-07 & 2007-08 by allowing, wherever applicable, the exemption claimed by the Petitioner under Entry 255 of the notification issued under Section 49(2) of the GST Act. However, certain tax liabilities were fastened on the petitioner on separate issues not related to the exemption. The details of the Assessment Orders for the year 2001-02, 2006-07 & 2007-08 are as under: S. No. Period Assessment order dated Other tax liability 1 2001-02 30.09.2006 1,14,843/- 2 2006-07 04.05.2011 1,89,56,643/- 3 2007-08 17.10.2011 37,222/- Total 1,91,08,708/- (3.10) Thereafter, the Respondent No. 5 issued two Notices both dated 18.01.2012 under Section 152 of the Gujarat Land Revenue Code, 1879 stating that the property of the Petitioner shall be seized if the outstanding sales tax liability for the year 2001-02 and 2007-08 is not paid within 10 days of the receipt of the Notice. (3.11) Further, the Respondent No. 5 issued a Notice dated 02.02.2012 under Section 152 of the Gujarat Land Revenue Code, 1879 stating that the property of the Petitioner shall be seized under Section 200, if the outstanding sales tax liability for the year 2006-07 is not paid within 7 days of the receipt of the Notice. (3.12) In response to the Notice dated 18.01.2012 & 02.02.2012, the Petitioner filed a reply dated 06.02.2012 before the Respondent No. 3 and submitted that the demand for the year 2001-02 & 2007-08 has been paid in full and for the year 2006-07, it was submitted that the Petitioner has filed an appeal which is pending for final bearing. It was informed that the issue in the year 2006-07 is limited to submission of declaration under Form C & F and the Petitioner is in receipt of the Forms, thus the liability of the Petitioner will be reduced. However, the Petitioner for the meantime, deposited Rs. 2,00,000/-. Further, it was requested that the attachment notice be withdrawn. (3.13) The Petitioner filed an appeal against the Assessment Order dated 04.05.2011 for the period 2006-07 before the Deputy Commissioner of Commercial Taxes, Dispute 4, Vadodara wherein an order dated 27.04.2012 was passed vide which the total demand of Rs. 1,89,56,643/- raised in the assessment order was reduced to Rs. 10,88,590/-. (3.13) The Petitioner filed an appeal against the Assessment Order dated 04.05.2011 for the period 2006-07 before the Deputy Commissioner of Commercial Taxes, Dispute 4, Vadodara wherein an order dated 27.04.2012 was passed vide which the total demand of Rs. 1,89,56,643/- raised in the assessment order was reduced to Rs. 10,88,590/-. (3.14) Further, the Petitioner vide its Letter dated 27.04.2012 submitted before the Respondent No. 3 that the dues with respect to the year 2006-07 has been paid in full; proof of payment was duly attached with letter. (3.15)Even though the Petitioner has paid its full liability, the Respondent No. 3 attached the immovable property of the Petitioner situated at District: Kheda, Taluka: Nadiad, Village: Karkarakhad Party situated at Moje Nadiad Chaklashi bearing Survey No. 3342 having area 2427 Sq. Meter & Survey No. 3343 having area 356 Sq. Meter. (3.16)The Petitioner received two letters dated 04.12.2013 from the Respondent No.4 stating that the land bearing Survey No. 3342 having area 2427 Sq. Meter & Survey No. 3343 having area 356 Sq. Meter at Moje Nadiad Chaklashi has been acquired for construction of six lane national highway and Petitioner was directed to submit the prescribed documents for claiming of the compensation. (3.17)The Petitioner submitted a letter dated 02.05.2014 before Respondent No. 4 submitting that the required documents have already been submitted but no compensation has not been received by the Petitioner even though the land of the Petitioner has been acquired. (3.18)The Petitioner again received two letters dated 25.06.2014 from Respondent No. 4 directing the Petitioner to submit some additional documents for claiming compensation. (3.19) A letter dated 20.11.2015 was issued to the Petitioner by the Special Land Acquisition Officer, Kheda intimating that the Order is passed to acquire the land situated at Moje Nadiad Chaklashi having Survey No. 3342 admeasuring 356 Sq. Mts. And Survey No. 3343/P admeasuring 2417 Sq. Mts. For construction of National Highway [this land was part of the property which was attached by the Respondent No. 3]. Further, the Petitioner was requested to submit the information with regard to the dues of the Government. (3.20) In response to the letter dated 20.11.2015 of Special Land Acquisition Officer, the Petitioner filed two Letters dated 07.12.2015 vide which it was submitted that there are no Government dues on Survey No. 3342 & 3343. The Petitioner further submitted that the Government due of Rs. (3.20) In response to the letter dated 20.11.2015 of Special Land Acquisition Officer, the Petitioner filed two Letters dated 07.12.2015 vide which it was submitted that there are no Government dues on Survey No. 3342 & 3343. The Petitioner further submitted that the Government due of Rs. 1,91,08,708/- is on other surveys of the land belonging to the Petitioner and such dues have already been paid by the Petitioner. Thus, it was requested to release the compensation amount of 2,20,21,115/-(Rs. 20,29,200 + 1,99,91,915/-). (3.21) Respondent No. 3 issued a letter dated 09.12.2015 to the Project ct Director, National Highway Authority of India stating that the petitioner has pending tale: tax / central tax liability and thus it was requested to NHAI that the compensation amount due to the Petitioner should not be released. (3.22)The NHAI submitted a Letter dated 17.12.2015 to the Special Land Acquisition Officer, Kheda stating that they have received a letter dated 09.12.2015 from the Respondent No. 3 requesting not to make payment of the compensation to the Petitioner. (3.23)The Special Land Acquisition Officer, Kheda issued & Letter dated 05.10.2016 to Respondent No. 3 stating that the Petitioner has submitted vide its Letter dated 07.12.2015 that all dues of Sales Tax have been paid. Thus, it was requested from Respondent No. 3 to conduct an investigation in this regard. (3.24) The petitioner filed a Letter dated 08.01.2019 before the joint Commissioner of Commercial Taxes (Appeals) requesting for revocation of burden on property documents. (3.25)As the Petitioner received no communication from the Respondent No. 3 regarding attachment of Petitioner’s property, the Petitioner was under the bona fide belief that as all outstanding tax liability for the year 2001-02, 2006-07 & 2007-08 has been paid, the property of the Petitioner has not been attached pursuant to the Notice dated 18.01.2012 and 02.02.2012. It is only in when the NHAI acquired the property of the Petitioner for construction of six lane national highway, the Petitioner found out that the Respondent No. 3 has attached the property of the Petitioner. (3.26)Thereafter, the Petitioner continuously made written representations before the competent authorities for release of attached property but the representations of the petitioner was not heeded and the petitioner is still deprived of its lawful rights. (3.26)Thereafter, the Petitioner continuously made written representations before the competent authorities for release of attached property but the representations of the petitioner was not heeded and the petitioner is still deprived of its lawful rights. (3.27) The petitioner was orally intimated that as the appeal for the year 2000-01 is pending the property of the petitioner is still attached, the petitioner thereafter, requested several times, the office of Joint Commissioner of Sales Tax, Vadodara to decide the pending appeal for the year 2000-01, at the earliest. As the major amount involved in the appeal pertains to the eligibility to avail exemption which has already been decided in favor of the petitioner in all the previous and subsequent years.” 5. Having regard to the stance of the State respondents, as reflected in the affidavit-in-reply filed on behalf of the respondent No.3, no further adjudication of this writ application is necessary. We take notice of the following averments made in the affidavit-in-reply: “10 The issue in the present petition pertains to the assessment year 2000-2001, 2001-2002, 2006-2007 to 2007-2008 for which assessment orders has been passed for the respective assessment years: Assessment year Date of order Amount payable 2000-2001 31.03.2005 Rs.5,07,98,532/- 2001-2002 13.08.2008 Rs.1,14,843/- 2006-2007 31.03.2011 Rs.1,77,96,677/- 2007-2008 19.10.2011 Rs.37,222/- 11. I say and submit that the petitioner herein paid an amount of pre-deposit amounting to Rs.51,53,367/- before the first appellate authority, when the assessment order qua assessment year 2000-2001 was challenged. Whereas, for remaining amount of Rs.5,07,98,532/-, the petitioner had given bank guarantee for a period of 3 months which stands expired as on date. It is further required to be noted. that. for the assessment year 2001-2002, the entire amount was assessed being Rs.1,14,843/-, has been paid by the petitioner herein. 12. Whereas, for the assessment year 2006-2007, the petitioner has paid Rs.10,85,000/-but as the petitioner had succeeded in appeal, the said amount paid by the petitioner was adjusted towards the tax difference for the assessment year 2006-2007, resultantly, out of Rs.1,88,81,670/-, Rs.10,00,000/- was deducted by the respondent authorities and the remaining amount was waived, as the petitioner succeeded before the first appellate authority in his appeal filed challenging the assessment order. 13. I say and submit with respect to the assessment year 2007-08, the said difference amounting to Rs.37,222/- was paid by the petitioner. 13. I say and submit with respect to the assessment year 2007-08, the said difference amounting to Rs.37,222/- was paid by the petitioner. Hence as on date the petitioner is liable to pay an amount of Rs.5,07,98,532/to the respondent authorities and hence a charge has been created on the property in question on 17/03/2012 in the revenue records by exercising the provisions of Section 44 of the Gujarat Sales Tax Act, 1968.” 6. Thus, it is accepted in the affidavit-in-reply that the requisite amount for the assessment year 2001-2002 has been paid by the writ applicant. In the same manner, it has been accepted that the requisite amount for the year 2007-2008 has also been paid by the writ applicant. If we go by the prayer clause, there is a reference of two notices i.e. for the year 2001-2002 and 2007-2008. Pursuant to the impugned notices, an order of attachment came to be passed with respect to the land bearing survey Nos.3341/1/2/3/4/5, 3346/1/4, 3126, 3127, 3335, 3336/1/2/3, 3121, 3122, 3223, 3124, 3342 and 3343. Since the attachment of the aforesaid parcels of land owned by the writ applicant is directly connected with the two notices dated 18th January 2012 and 2nd February 2012 respectively and as the payment has been made, the attachment should go. 7. In such circumstances, there should not be any difficulty in quashing and setting aside the two impugned notices. Once the impugned notices are quashed, the attachment as per such notices would no longer survive and once the attachment goes, the charge, which has been created over the property pursuant to such notices, would also not survive. 8. It is further pointed out that some portion of the parcels of land referred to above by the writ applicant has been acquired by the respondent No.5. The acquisition proceedings have attained finality. The writ applicant is awaiting for compensation. However, compensation is not being paid because the order of attachment and the charge over such parcels of land. 9. So far as the present litigation is concerned, we are not going into the issue of acquisition and compensation. We may only say that once the notices are quashed and the attachment pursuant to such notices would no longer survive, it is for the writ applicant to point out this fact to the respondent No.5 and claim compensation in accordance with law. 10. Mr. We may only say that once the notices are quashed and the attachment pursuant to such notices would no longer survive, it is for the writ applicant to point out this fact to the respondent No.5 and claim compensation in accordance with law. 10. Mr. Chintan Dave, the learned A.G.P. appearing for the State respondents submits that this would not be the end of the matter. There are other dues which are payable by the writ applicant. We are not going into this issue because we are called upon to look into the two impugned notices and with respect to the two impugned notices, the State has accepted that the payment has been made by the writ applicant. 11. We take notice of the fact that there is an appeal preferred by the writ applicant against the final order of assessment for the year 2000-01. This appeal is pending as on date. In fact, it is pending past almost fifteen years. We direct the respondent No.2 to take up the appeal preferred by the writ applicant for hearing and dispose it of expeditiously in accordance with law. 12. With regard to the compensation, it shall be open for the writ applicant to now take up the issue with the respondent No.5. 13. At this stage, Mr. Saurabh Soparkar, the learned senior counsel appearing for the writ applicant pointed out that inadvertently, in the prayer clause, there is no reference of the notice for the year 2006-2007. According to him, even for the year 2006-2007, the requisite amount has been paid by the writ applicant. This is evident from the averments made in para 12 of the affidavit-in-reply filed by the respondent No.3. Para 12 reads thus: “Whereas, for the assessment year 2006-2007, the petitioner has paid Rs.10,85,000/- but as the petitioner had succeeded in appeal, the said amount paid by the petitioner was adjusted towards the tax difference for the assessment year 2006-2007, resultantly, out of Rs.1,88,81,670/-, Rs.10,00,000/- was deducted by the respondent authorities and the remaining amount was waived, as the petitioner succeeded before the first appellate authority in his appeal filed challenging the assessment order.” 14. In view of the above, the notice for the year 2006-2007 would also not survive. 15. In the result, this writ application is allowed. The two impugned notices dated 18th January 2012 and 2nd February 2012 are hereby quashed and set aside. In view of the above, the notice for the year 2006-2007 would also not survive. 15. In the result, this writ application is allowed. The two impugned notices dated 18th January 2012 and 2nd February 2012 are hereby quashed and set aside. The attachment pursuant to such notices would no longer remain and the same stands revoked. In view of the same, the charge of the Sale Tax Department over the parcels of land pursuant to such notices would also no longer remain.