Gujarat High Court
Suresh vs Union on 3 March, 2010
Gujarat High Court Case Information System
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SCA/8948/2008 5/ 6 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 8948 of 2008
For
Approval and Signature:
HONOURABLE
MR. JUSTICE D.A.MEHTA
HONOURABLE
MS. JUSTICE H.N.DEVANI
=========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================
SURESH
KUMAR M. BHINGARADIA & 1 - Petitioner(s)
Versus
UNION
OF INDIA & 3 - Respondent(s)
=========================================
Appearance
:
MR DV
PARIKH for
Petitioner(s) : 1 - 2.
NOTICE SERVED BY DS for Respondent(s) : 1 -
4.
MR GAURANG H BHATT for Respondent(s) : 1,
MR NV ANJARIA for
Respondent(s) : 4,
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CORAM
:
HONOURABLE
MR. JUSTICE D.A.MEHTA
and
HONOURABLE
MS. JUSTICE H.N.DEVANI
Date
: 03/03/2010
ORAL
JUDGMENT
(Per : HONOURABLE MR. JUSTICE D.A.MEHTA)
1. In light of the view that the Court is inclined to adopt, the petition is taken up for final hearing and disposal today. Rule. Learned advocates appearing for the respective respondents are directed to waive service.
2. The facts in brief as are necessary for the present. The petitioners have challenged the action of respondents no.1, 2 and 3 in asking respondent no.4 Corporation to desist from transferring land and building in question situated at Plot No.3307/B, GIDC, Ankleshwar in the name of the first petitioner. It is the case of the petitioners that the assets of one M/s. Sun Polytron Industries Limited were purchased at a public auction conducted under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with rules thereunder from a secured creditor, Industrial and Financial Corporation of India, Mumbai. Upon the petitioners approaching respondent no.4 Corporation
- Gujarat Industrial Development Corporation (GIDC), the petitioners were informed by GIDC to obtain a 'No Objection Certificate' (NOC) from the Central Excise Department. The petitioners thereupon approached Central Excise Department but NOC was not granted and the petitioners were called upon to discharge duty liability existing in case of M/s. Sun Polytron Industries Limited. Hence, the petition.
3. Learned advocate appearing for the petitioners submits that Excise Department cannot insist on asking GIDC to desist from effecting transfer of immovable property belonging to GIDC in absence of any powers available with Central Excise authorities.
4. On behalf of Central Excise Department, it was submitted that as per terms and conditions of auction sale which appear at Annexure 'L' vide Clause Nos.7.6 and 8.1, the petitioners are liable to discharge all statutory liabilities and make payment of taxes and levies. Therefore, Central Excise Department is justified in insisting for payment of outstanding dues of M/s. Sun Polytron Industries Limited before a No Objection Certificate could be issued to enable GIDC to transfer the immovable property.
5. On behalf of GIDC, learned advocate placed reliance on the affidavit-in-reply dated 24th June, 2009 and submitted that GIDC was merely cooperating with a Department of Union of India. It was further submitted that GIDC can transfer the immovable property belonging to GIDC only upon a requisite application being tendered in appropriate format and after dues of GIDC are paid off.
6. The facts are eloquent and need not be repeated. Admittedly, Central Excise Department is not in a position to point out any provision either under the Central Excise Act, 1944 or any rules thereunder which would permit Central Excise authorities to send the communication of the nature of the communication forwarded by Central Excise Department to GIDC. In this context, paragraph No.4.4 of the affidavit filed by GIDC, which reads as under makes the position clear:-
4.4 I further say that apart from above, the Corporation received a communication dated 26.3.2008 from the Office of Assistant Commissioner, Central Excise & Customs, Division-II, Ankleshwar stating inter alia that M/s. Keshwani Synthetics Industries Ltd and its directors had failed to pay the dues of the Department. I further say that in the letter dated 4.1.2008 by the Central Excise & Customs Department, request is made to the Corporation that the ownership of the M/s. Keshwani Synthetics Industries Ltd, should not be transferred in other name until the NOC certificate is given to the said assessee in view of the fact that Central Excise dues are not paid by the said party. Copy of the said notice 4.1.2008 from the Excise Department is annexed herewith as Annexure-II. It appears that the Commissioner (Appeals), Central Excise & Customs, Surat-II, has passed an order whereunder the said party is required to pay excise duty, penalty etc.
7. Thus, even GIDC is aware that the outstanding dues are not the liability of the petitioners. GIDC is a statutory Corporation having been incorporated under the provisions of the Statute and is thus bound by its own Constitution as per provisions of the said Act. GIDC can raise a demand, even in the form of asking for an NOC, only in relation to any dues to which GIDC is entitled as per the terms and conditions under which the immovable property belonging to GIDC is leased out. GIDC is right to the extent GIDC is asking for an application for transfer in the prescribed format accompanied by requisite fees, if any. Similarly, if any dues of GIDC are outstanding in relation to the immovable property in question, GIDC is entitled to seek satisfaction thereof before effecting transfer of the immovable property in favour of the petitioners. However, by no stretch of imagination can GIDC seek to recover dues of Central Excise Department by asking the petitioners to obtain an NOC from Central Excise Department.
8. The contention based on Clause Nos. 7.6 and 8.1 of the terms and conditions does not merit acceptance. The said terms are stipulated by the secured creditor for auctioning the property. Central Excise Department would have had no role. Even otherwise, a plain reading of the said two clauses indicates that the reference is to any statutory liability that may arise in connection with sale, e.g. sales tax, purchase tax, stamp duty, etc.
9. In the facts and circumstances of the case, the communication by Central Excise Department cannot bind GIDC and GIDC is duty bound to effect transfer of the immovable property if all other requisite formalities as required by law are completed by the petitioners. GIDC is, therefore, directed to effect transfer of the immovable property subject to the petitioners making an application in the prescribed format accompanied by necessary fees, if any.
10. Learned advocate for the petitioners states that the necessary application in the prescribed format will be made within a period of a fortnight from today as required by GIDC. Thereupon, GIDC shall undertake the exercise to effect transfer of the immovable property and the same shall be completed within a period of four weeks from the date of receipt of the requisite application from the petitioners. Needless to state that GIDC shall be entitled to recover all dues of GIDC in accordance with law before effecting the transfer.
11. The petition is allowed accordingly in the aforesaid terms. Rule made absolute with no order as to costs.
( D.A. Mehta, J. ) ( Harsha Devani, J. ) hki Top