M/s. Resonance Specialties Ltd. vs State of M.P. and Others

Petitioners have sought following reliefs:-

A writ in the nature of Certiorari be issued for the quashment of attachment order dated 27.2.2013 (Ann.P/7) by virtue of which raw material worth Rs. 50 lakh belonging to the Petitioner No. 1 of which job work was being done by the Petitioner No. 2 has been attached.

A writ in the appropriate nature by issued commanding the Respondents for getting the pending representation contained in Annexure P/14 & P/15 decided expeditiously as per law.

Case of the petitioners is that there are dues of tax of more than Rs. 50 lakhs against the petitioner No. 2. The petitioner No. 2 is a process house and the material relating to petitioner No. 1 was with petitioner No. 2 for processing only. The respondent No. 3 has attached the aforesaid material for recovery of dues of tax against the petitioner No. 2 while the aforesaid material has no concern with petitioner No. 2 and belongs to the ownership of petitioner No. 1. It is submitted that the aforesaid attachment of properties of petitioner No. 1 may be quashed and directed to be released to the petitioner No. 1 by respondent No. 3.

Shri Samdarshi Tiwari, learned G.A. submitted that if the material belongs to petitioner No. 1 and has no concern with petitioner No. 2, then petitioner No. 1 may file a duly constituted petition under Rule 22 Schedule I of the M.P. Land Revenue Code, 1959 [hereinafter referred as the Code] for release of the properties. It is also submitted by him that u/s 24(11) of the VAT Act, the Commercial Tax Officers have been vested with the powers of Tahsildar under the Code and while exercising such powers, they have also to follow the rules made under the Code in respect of attachment and auction of the properties. It is submitted that once the property has been attached and any third party is claiming its right in the property, the same can be enquired into by the competent authority as is provided under Rule 22 Schedule I of the Code.

Shri Purohit, learned counsel submitted that the petitioner may be permitted to file an application before respondent No. 3 for release of the properties of petitioner No. 1 as is required under Rule 24 Schedule I of the Code. It is also submitted by him that respondent No. 3 may be directed to decide the aforesaid application expeditiously.

To this Shri Tiwari, learned Counsel appearing for the State has no objection.

Section 24(11) of the VAT Act reads thus:-

24(11)(a) If any amount of tax, interest, penalty, or any other amount due under this Act or the Acts repealed by Section 52 of the Act No. 2 of 1959 or the Act repealed by Section 81 of Act No. 5 of 1995 or the Act repealed by this Act (hereinafter referred to as the repealed Act) remains unpaid on the expiry of the period prescribed for the payment thereof by or under this Act or the repealed Act or on the expiry of the period specified in any notice of demand or order issued or made under this Act or the repealed Act or the rules made thereunder, for the payment thereof, the dealer or person liable to pay such amount shall be deemed to be in default as to the whole of the amount then outstanding.

(b) When a dealer or person is in default or is deemed to be in default under clause (a), the amount outstanding shall be recoverable as an arrear of land revenue according to the provisions of the Madhya Pradesh Land Revenue Code, 1959 ( No. 20 of 1959) and for the purpose of effecting the recovery of such amount-

(i) the Appellate Board shall have and exercise all the powers and perform all the duties of the Board of Revenue under the Madhya Pradesh Land Revenue Code, 1959.

(ii) the Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of the Commissioner under the Madhya Pradesh Land Revenue Code, 1959.

(iii) [Special Commissioner of Commercial Tax, Director of Commercial Tax] and an Additional Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of the Additional Commissioner under the said Code.

(iv) a Deputy Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of the Collector under the said Code;

(v) an Assistant Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of [Sub Divisional Officer] under the said Code.

(vi) a Commercial Tax Officer and Assistant Commercial Tax Officer shall have and exercise all the powers and perform all the duties of the Tahsildar under the said Code.

The aforesaid provision specifically provides that the Commercial Tax Officer shall exercise all the powers and perform all the duties of the Commissioner under the M.P. Land Revenue Code, 1959 and under Clause (vi) of sub clause (b), the Commercial Tax Officer shall have and exercise all the powers and perform all the duties of the Tahsildar under the said Code. Schedule I of the Code provides a procedure in respect of attachment and sale of the immovable property. For ready reference Rule 22 and 24 of Schedule I of the M.P. Land Revenue Code, 1959 are reproduced which reads thus:-

The provisions of Order XXI Rule 46 to 53 of the Code of Civil Procedure, 1908 regarding the attachment of the several classes of movable property dealt with in those rules shall, as far as may be, apply to the attachment made under this Code.

24(1). If any claim is set up by a third person to the property attached or proceeded against under the provisions of this Code, the Revenue Officer shall enquire into the claim and may admit or reject it.

(2) The person against whom an order is made under sub-rule (1) may, within one year from the date of the order, institute a suit to establish the right which he claims to the property attached or proceeded against; but subject to the result of such suit, if any, the order shall be conclusive.

The aforesaid provisions specifically provide that the provisions in CPC in so far as the attachment of the movable properties shall be applicable in the matter. Rule 24(1) provides adjudication of the claim to, or objections to attachment of the property which is attached. If any application under Rule 24 of the Code is filed the officer attaching the property is under an obligation to adjudicate the right of the property and if it is found that the property which has been attached belongs to third person and not to the assessee, then these properties have to be released from the attachment. In this regard the respondent No. 3 has been vested wide powers to exercise and decide the claims of the petitioner No. 1. In view of the aforesaid, we finally dispose of this matter with the following directions:-

Petitioner No. 1 is permitted to move an application under Rule 24(1) of Schedule I of the Code to the respondent No. 3 raising its contention against the attachment of the movable property(s).

If any such application is filed within 30 days from today, respondent No. 3 shall adjudicate the aforesaid application in accordance with law, expeditiously as far as possible within a period of two months from the date of filing of such an application.

No order as to costs.