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Orissa High Court

M/S. Toshali Cement Pvt. Ltd vs State Of Orissa And Others .... Opposite ... on 14 March, 2022

Author: A.K. Mohapatra

Bench: A.K. Mohapatra

                 IN THE H IGH COURT OF ORISSA AT CUTTACK
                                 W.P.(C) No.10451 of 2004

            M/s. Toshali Cement Pvt. Ltd.                 ....             Petitioner
                                       Mr. Jagabandhu Sahoo, Senior Advocate
                                         -versus-
            State of Orissa and others                ....      Opposite Parties
                                     Mr. Sunil Mishra, Addl. Standing Counsel

                         CORAM:
                         THE CHIEF JUSTICE
                         JUSTICE A.K. MOHAPATRA

                                           ORDER

Order No. 14.03.2022

04. 1. The subject matter of the present proceeding is a challenge to a demand raised against the present Petitioner by the Sales Tax Authority exercising powers under Section 9(C) of the Orissa Sales Tax Act and Section 7 (1) of the Central Sales Tax Act which was in fact a liability of the erstwhile industry M/s. Snehadhara Industries Ltd. (SIL) which was taken over by the present Petitioner.

2. In the impugned order dated 27th October 2003 passed by the Commissioner of Commercial Taxes, Orissa in the Petitioner's Revision Case No. PU-250/03-04, it has been observed that a pre- requisite for fastening liability of the transferer company to the transferee company as far as sales tax dues is concerned is determining whether in fact there is a complete transfer of all liabilities of the transferer entity. For this purpose, in paragraph-8 of the impugned order dated 27th October 2003, a direction has been issued to the Department to "gather evidence regarding transfer of business in entirety to fasten liability on the Petitioner". Six months time was granted to the Department for that purpose.

3. While the present petition was pending, this Court had by an order dated 30th June 2006 recorded the submissions of learned counsel for the Department that he was not in a position to inform the Court whether the said investigation had been completed or not. Three weeks time was sought and granted for that purpose.

4. Those three weeks have long since expired. In the past, eighteen years during the pendency of the present petition, it appears that no investigation was in fact undertaken to determine whether the entire liability is of SIL got transferred to the present Petitioner as a result of the takeover.

5. Without that basic fact being established, a demand raised against the present Petitioner for amount due to the Department by the erstwhile SIL i.e. the transferer company cannot be sustained in law.

6. On that short ground, the impugned demand raised in Annexure-3 dated 27th September 2003 and to the extent it has been sustained in the order dated 27th October 2003 of the Commissioner is hereby set aside.

7. The writ petition is disposed of in the above terms.

8. An urgent certified copy of this order be issued as per rules.

(Dr. S. Muralidhar) Chief Justice (A.K. Mohapatra) Judge S.K. Guin Page 2 of 2