Bombay High Court
Camelot Enterprises Private Limited vs Tax Recovery Officer Central -3 And 3 Ors on 1 April, 2019
Author: Akil Kureshi
Bench: Akil Kureshi, Sarang V. Kotwal
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.992 OF 2019
M/s Camelot Enterprises Private Limited
a private limited company,
having its registered office at
64, H/2, 1st floor, Bansilal Building,
J.S.S. Road, Opera House, Mumbai 400 004.
Through its Director,
Mr.Hemant Dahyalal Bhatt,
currently stationed at
Mumbai Central Prison, Mumbai .... Petitioner
versus
1. Tax Recovery Officer Central-3
Room No.1907, 19th Floor,
Air India Building, Nariman Point,
Mumbai - 400 021.
2. Assistant Commissioner of Income Tax
Central Circle 6(2), Mumbai
Air India Building, Nariman Point,
Mumbai - 400 021.
3. Principal Commissioner of Income Tax
19th Floor, Air India Building,
Nariman Point, Mumbai - 400 021.
4. Union of India
Through the Secretary,
Ministry of Finance,
Aykar Bhavar, Churchgate,
Mumbai - 400 020 ... Respondents
.......
Nesarikar
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• Ms.Fereshte Sethna a/w Adhiraj Malhotra, Hasmukh Ravaria
& Kiran Padalkar i/b. India Law Alliance, Advocate for
Petitioner.
• Mr.Anil Singh, ASG a/w Mr.N.C. Mohanty & Ms. Geetika
Gandhi, Advocate for Respondent/UOI.
CORAM : AKIL KURESHI &
SARANG V. KOTWAL, JJ.
DATE : 01st APRIL, 2019.
JUDGMENT :(PER : AKIL KURESHI, J.)
1. Petitioner M/s Camelot Enterprises P. Ltd. is a limited company registered under the Companies Act. The Petitioner has challenged the orders passed by the Assessing Officer in December 2018 as also the Tax Recovery notices dated 05/02/2019 and 20/02/2019 seeking to recover the tax arising out of the orders of assessment through sale of certain properties of the Petitioner.
2. We may record the brief facts at the outset.
Case of the Petitioner company is that, the company had two Directors namely one Mr.Hemant D. Bhatt and Mr.Ramesh M. Assar. Investigation has been initiated against the company. The Registered office and the premises of the ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 3 / 29 05-WPL-992-19.odt company have been sealed. Director Mr.Hemant Bhatt has been taken in judicial custody. According to Petitioner, Mr.Ramesh Assar resigned from the position of the Director effective from 05/09/2018.
Under such circumstances the point of dispute between the Petitioner and the Respondents is with respect to service of notices of assessment as well as for recovery of taxes through auction sale. The Petitioner contends that there was no proper service of notices on the company. One of the Directors being in judicial custody, the Department could not have relied upon either dispatch of notice to the address of the company, which admittedly had returned unserved or on affixation of the notices at the company's registered address. According to the Petitioner, service of notice on Mr.Assar would be of no avail, since he had already resigned from the Directorship of the company before the service of notice. According to the Petitioner, therefore, entire assessment proceedings were completed without a valid notice on the assessee.
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4 / 29 05-WPL-992-19.odt Similarly, the Petitioner contends that there was no valid notice of the attachment and proposed sale of properties of the company for realization of the tax dues arising out of assessment orders. In relation to the auction sale, the Petitioner's additional contention is that out of 68 paintings and artworks put for auction by the Tax Recovery Officer, only 19 are owned by the company. Tax authorities therefore could not have, in any case, put such paintings and artworks to sale which did not belong to the Petitioner. Even though, such fact was brought to the notice of Tax Recovery Officer, he ignored the same and proceed further with the auction.
3. The Petition was mentioned before us for urgent hearing on 25/03/2019, when it was pointed to us that auction is scheduled on 26/03/2019. We were not inclined to take up hearing of the Petition on 26/03/2019 since in our opinion, the Petitioner had moved the Court at the last minute. It would not be proper to allow the auction proceedings to continue under ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 5 / 29 05-WPL-992-19.odt the impeding shadow of the hearing of the Petition. We had therefore granted circulation of the Petition on 27/03/2019 on which date, after hearing both the learned Counsel, following order was passed;
"1. The Petitioner has challenged the auction proceedings initiated by the Tax Recovery Officer for recovering the Petitioner's dues arising out of the assessment orders passed by the Assessing Officer under Section 153A of the Income Tax Act, 1961. The case of the Petitioner is that copies of such orders have not been provided to the Petitioner. Due to this, the Petitioner has not been able to appeal against such assessment orders which are stated to have been passed on 18 th December, 2018. Further, according to the Petitioner, out of a total of 68 paintings and drawings put for auction, the Petitioner is owner of only 19 of them.
2. Learned ASG appears for the Income Tax Department on advance notice and prays for time for filing reply.
3. Stand over to 01/04/2019. Reply shall be filed before such date.::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 :::
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4. We are informed that the auction was conducted on 26/03/2019. Any further steps in furtherance of such auction proceedings, shall be subject to the outcome of this petition. The Respondents, in the reply, would clarify the position of the ownership of the paintings and drawings put to auction. The respondents shall also produce copies of the assessment orders."
4. Consequently, today the Petition was taken up for further hearing by which time, the Respondents had filed a reply with advance copy to the Petitioner. Learned Counsel for the Petitioner argued the Petition extensively raising following contentions;
(i) There was no valid service of notice of assessment. The orders of assessment therefore are invalid and non-est. In this context, Counsel for the Petitioner took us extensively to the provisions contained in Income Tax Act, 1961 ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 7 / 29 05-WPL-992-19.odt (for short 'the Act'), Income Tax Rules, 1963 (for short 'the Rules') and the provisions of Civil Procedure Code (for short 'CPC'). On the basis of such provisions, the learned Counsel strenuously urged that the department had failed to demonstrate valid notice before completion of assessments. She argued that sole Director of the Petitioner-company was in judicial custody. The department therefore had to either serve the notice of assessment on him, even if he was in judicial custody or ought to have followed the alternative procedure as envisaged in Order V of CPC. She further contended that Mr.Assar before tendering of the notice by the department had resigned as the Director of the company. He had conveyed the same to the department. The Respondents refused to accept this factual position only on the ground that there was no evidence of resignation of Mr.Assar and in any ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 8 / 29 05-WPL-992-19.odt case, as per the company law, a private company must have minimum two Directors. According to her, whatever be the position in law as per the Companies Act, the department cannot proceed on the basis that the service on the company was completed by relying on service of notice on a retired Director.
(ii) Counsel further submitted that the Petitioner was not the owner of all 68 paintings and artworks put to auction. The Petitioner owned only 19 of them. The department has no evidence to suggest the ownership of the Petitioner. Without sufficient evidence and full enquiry, the department cannot put such paintings and artworks to sale. Counsel submitted that these facts were brought to the notice of department which were totally ignored.
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5. On the other hand, learned Counsel for the Department opposed the Petition. Placing reliance on the affidavit-in-reply dated 30/03/2019 filed by one Mr.Bipin Kumar Gupta, Tax Recovery Officer, he submitted in the Petitioner-Company, one Mr.Nirav Modi holds 99.95% equity shares. Search and seizure action was conducted, during which it was found that as many as 173 paintings and artworks were stored by the company at the premises of M/s Fine Art Warehousing and Logistics P. Ltd. Those were received from the Petitioner-Company. Statement of the Director of the Petitioner- Company Hemant Bhatt was recorded. It was suggested that he was a dummy Director and was working under the instructions of Nirav Modi and adjusted his unaccounted cash transactions. Counsel submitted that the department had taken all steps to serve notice of assessment on the Petitioner-Company. Service was in fact effected after which, in absence of any participation from the Petitioner, assessment was completed exparte. After waiting for the full period for filing Appeal, since no Appeal was filed, the department initiated recovery proceedings. Here again, ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 10 / 29 05-WPL-992-19.odt after service of notice to the Petitioner for recovery, properties in question were attached and thereafter put to sale through auction. He stated that auction was completed on 26/03/2019 as scheduled, during which all the paintings and artworks were sold for a total consideration of Rs.54,84,25,000/-. He submitted that proceedings under the Prevention of Money Laundering Act, 2002 (for short 'PMLA') are pending before the competent Court. Permission of the said Court was obtained before carrying out the auction. In view of the pendency of the proceedings under the PMLA, the amount fetched through sale proceeds is kept in the escrow account to be adjusted upon completion of such proceedings. He submitted that the Petitioner has prima facie evidence to suggest that of paintings and artworks belong to the Petitioner. Except for a bare statement, the Petitioner has not produced any material to suggest that any of the paintings and artworks do not belong to the Petitioner. He submitted that the entire proceedings have been given wide publicity. From time to time, the public at large had opportunity to learn about the proposed auction. Till the time auction was conducted and ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 11 / 29 05-WPL-992-19.odt even till date, no person has claimed ownership of the said properties. The Petitioner is therefore merely trying to delay the proceedings by taking up an invalid defence.
6. Before addressing rival contentions, we may peruse the material on record more minutely. In the Petition, the Petitioner's main averments are that premises of the company are sealed by the CBI and that the Director of the company Mr.Hemant Bhatt has been taken in judicial custody. It is also stated that the other Director Mr.Ramesh Assar ceased to hold office of Director on 05/09/2018. In this context, Petitioner relied on the Company Master Data downloaded from the official website of Ministry of Corporate Affairs, showing that said Mr.Ramesh Assar was the Director of the company on 10/01/2012 and his tenure ended on 05/09/2018. The Petitioner has further averred that;
"......as per the best knowledge of the Petitioner's director Shri Hemant Dahyalal Bhatt, the Petitioner hold ownership/right, title, interest only to nineteen (19) ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 12 / 29 05-WPL-992-19.odt paintings/artworks. In effect, the balance forty-nine (49) paintings/artworks are not in the ownership of the Petitioner. Details of artworks in the ownership of the Petitioner are set forth in email dated 23 March 2019 to Respondent No.1 (at Exhibit 'O' above)......."
In this context, the Petitioner relies on the communication dated 23/03/2019 made by the legal representatives of the Petitioner along with which communication, objection to the proposed auction was attached which reads as under;
"SUB: Objection under section 224 of the Income-tax Act, 1961 We are concerned for our Client, Camelot Enterprises Pvt. Ltd (acting through its Director, Hemant Dahyalal Bhatt), under whose instructions we have to write to you as under:
1. We state, that, from recent media reports, it emerges that Saffronart is due to conduct an auction of artworks allegedly belonging to Camelot Enterprises ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 13 / 29 05-WPL-992-19.odt Private Limited ("the Company"), on 26 March 2019, at the behest of the Tax Recovery Officer, in order to recover purported tax arrears.
2. By letter dated 21st February 2019 (delivered, 27 February 2019), you were advised that the sole director of the Company, Shri Hemant Dyalala Bhatt, is in judicial custody.
3. It is also a matter of record that all books, papers, records of the Company have been seized by statutory authorities, and the premises of the Company have been sealed.
4. In the circumstances, the purported tax assessment proceedings and/or tax recovery notice dated 5 th February 2019, bearing no.TRO/C-
3/Recovery/2018-19/TRC No.443 to 450, purporting to quantify tax arrears of the Company in the sum of Rs.95,91,82,589, or steps for sale of assets in aid of tax recovery, are prima facie invalid, and liable to be declared otiose.
5. The Saffronart online art catalogue lists 68 artworks due for auction; overlooking that only 19 works from out of the 68 artworks belong to the company.::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 :::
14 / 29 05-WPL-992-19.odt These are set forth below:
S.No. Painting SAFFRONART (INR)
Lot No. Estimate
1. 2 18,00,000/-
2. 18 6,00,000/-
3. 29 3,00,000/-
4. 30 6,00,000/-
5. 33 7,00,000/-
6. 34 60,00,000/-
7. 36 7,00,000/-
8. 40 25,00,000/-
9. 48 2,00,000/-
10. 49 6,50,000/-
11. 50 15,00,000/-
12. 52 8,00,000/-
13. 53 8,00,000/-
14. 54 1,00,00,000/-
15. 55 5,00,000/-
16. 57 3,00,000/-
17. 58 7,00,000/-
18. 59 3,00,000/-
19. 65 5,00,000/-
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6. In the circumstances, the purported auction is unlawful, and liable to be cancelled forthwith.
7. You are hereby called upon to forthwith deliver the purported assessment orders culminating in alleged tax arrears of Rs.95,91,82,589/- per reply."
7. The Respondents have filed a detailed affidavit-in- reply, in which the main averments are that the Petitioner is a company in which Mr.Nirav Modi has 99.95% equity shares. The company was subjected to search action, during which it was found that paintings and artworks were stored at the premises namely M/s Fine Art Warehousing and Logistics P. Lts. B-203, Antop Hill Warehousing Complex, Wadala East, Mumbai. The statement of the Director of the said warehouse was recorded, which suggested that it was the Petitioner company, which had stored all the artworks and paintings and that, his company had never kept any other artwork and paintings of Mr.Nirav Modi and his entities other than the Petitioner. He stated that bills in this respect were raised to the Petitioner company. ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 :::
16 / 29 05-WPL-992-19.odt In this context, in the affidavit-in-reply, following averments are made, which are not controverted by the Petitioner ;
"I further submit that the Petitioner's claim that it is the owner of merely 19 paintings out of 68 paintings auctioned is not correct. The Proclamation was made on 07.03.2019, i.e. 19 days before the auction. No claimant to the artworks has come forward with the claim of ownership of paintings. No body has done so till the filing of this affidavit. The petitioner has not filed any evidence in support of its claim. It was found during the search action that 173 paintings and artworks were stored at M/s. Fine Art Warehousing and Logistics P. Ltd., B-203, Antop Hill Warehousing Complex, Wadala East, Mumbai 400037. As per documents available at the warehouse the paintings had been received from M/s. Camelot Enterprises P. Ltd. (Exhibit-A1). Further, statement of the Director of the warehouse, Sh. Dadiba Pundole, was recorded on 05.03.2018 (Exhibit-B1) who stated in response to Q.Nos.13, 14 and 15 that his company M/s. Fine Art Warehousing and Logistics P. ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 :::
17 / 29 05-WPL-992-19.odt Ltd. has billed only to M/s. Camelot Enterprises P. Ltd. for storage of artwork & paintings and also stated that his company has never kept any other artwork and paintings of Shri Nirav Modi and his entities other than M/s. Camelot Enterprises P. Ltd. Copy of the bill for charges for storing paintings dated 26.10.2017 raised by the warehouse on M/s. Camelot Enterprises P. Ltd. (Exhibit-B2). The aforementioned facts show that the Petitioner is the owner of all the paintings put up for auction on 26.03.2019."
The statement of Mr.Hemant Bhatt was also recorded, in which it was stated that he was working under the instructions of Nirav Modi for making cash purchases and cash sales of diamonds and for making unaccounted cash transactions. The statement of Hemant Bhatt was recorded under PMLA Act by Enforcement Directorate, in which he had stated that he had never attended any Board Meeting of the company and that he would sign the minutes as instructed.
In the affidavit it is further stated that the notices were also sent to Mr.Assar on 06th and 07th September 2018. He ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 18 / 29 05-WPL-992-19.odt conveyed under the letter dated 05/10/2018 that he had resigned as a Director of the company as on 05/09/2018 and that he does not have any access to the records of the company. According to Respondents this was contrary to the requirement of minimum two Directors of the company. The Respondents also collected information from the Registrar of the Companies on 28/03/2019, which suggested that Mr.Ramesh Assar had not ceased to be the Director of the company and that his name continues to be shown as a Director as certified by the letter of Registrar of Companies dated 28/03/2018. According to Respondents said Mr.Ramesh Assar has not provided any evidence of his resignation.
It is further stated that the assessment orders and notices of demand were dispatched by speed post to the company on 26/12/2018, from where they were returned with the postal remark 'Left'. The assessment orders were therefore served by affixation on the office address of the company on 04/01/209. Thereafter after waiting for the statutory period for ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 19 / 29 05-WPL-992-19.odt filing Appeal, in absence of any Appeal, the recoveries were initiated.
In the context of the recovery notice also it is stated that proclamation of sale was issued on 07/03/2019, which was published in the local newspapers namely Times of India (in English) and Loksatta (in Marathi) on 08/03/2019 and Navbharat Times (in Hindi) on 09/03/2019. The reminder for recovery was sent on 28/02/2019 which also returned unserved. The notices were also sent by email to the assessee and its Directors. The same was also served by affixation on 29/02/2019. The sale proclamation was served by affixation on 07/03/2019.
Along with this reply, several documents have been produced including the orders of assessment which comprise of six orders under section 153A of the Act, one under section 153C and one under section 144 of the Act. The documents also include the statements recorded by the departmental authorities referred to in the earlier portion. The Respondents have also ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 20 / 29 05-WPL-992-19.odt produced a letter dated 25/03/2019 written by the Tax Recovery Officer to India Law Alliance, representative of the Petitioner conveying that he had received a letter dated 23/03/2019 on 25/03/2019, since 23/03/2019 was not a working day. He stated that the letter was not accompanied by any authority from the assessee. Hence no cognizance of such letter had been taken.
8. The prayers of the Petitioner are in two parts. First is with respect to assessment orders which are challenged in this petition. Primary ground for challenge according to Petitioner, is invalid service of notices. The second part of the Petitioner's challenge is to the auction proceedings. This challenge rests on the ground of illegal assessment orders giving rise to tax demand, which is sought to be recovered and that the paintings and artworks, which are put for auction sale, did not belong to the Petitioner. This challenge also as an element of service of attachments and auction proceedings.
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9. In relation to the Petitioner's challenge to the assessment orders, for several reasons, we are not inclined to interfere in the present Petition. Firstly, the very question of validity or otherwise of service the notices of assessment would require detail examination of facts on record. The question of validity does not rest only on legal contentions. It would require a detail examination of facts, which must be done by the departmental authorities in statutory Appeals provided under the Act. It is well settled that when question of law and facts arises, the High Court in exercise of its writ jurisdiction would be slow in interfering with the orders passed by the competent authority. Availability of alternative efficacious remedy would be a ground to refuse to entertain the writ petition directly aimed at an order of assessment. When a taxing statute provides for statutory remedies, this Court would be slow in by passing such remedies and entertaining the writ petition directly aimed at the order of assessment. Reference in this respect can be made to the decision of the Supreme Court in the case of Commissioner of Income-Tax and others Vs. Chhabil Dass Agarwal 1. The 1 [2013] 357 ITR 357 (SC) ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 22 / 29 05-WPL-992-19.odt Court after referring to the several judgments on the point observed as under;
19. Thus, while it can be said that this Court has recognized some exceptions to the rule of alternative remedy, i.e., where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case, Titagarh Paper Mills case and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.
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20. In the instant case, the Act provides complete machinery for the assessment/re-assessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the Assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram and Shyam Co. v. State of Haryana (1985) 3 SCC 267 this Court has noticed that if an appeal is from "Caesar to Caesar's wife" the existence of alternative remedy would be a mirage and an exercise in futility. In the instant case, neither has the Assessee-writ Petitioner described the available alternate remedy under the Act as ineffectual and non-efficacious while invoking the writ jurisdiction of the High Court nor has the High Court ascribed cogent and satisfactory reasons to have exercised its jurisdiction in the facts of instant case.
21. In light of the same, we are of the considered opinion that the Writ Court ought not to have entertained the ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 24 / 29 05-WPL-992-19.odt Writ Petition filed by the Assessee, wherein he has only questioned the correctness or otherwise of the notices issued under Section 148 of the Act, the re- assessment orders passed and the consequential demand notices issued thereon.
10. Additionally, the Petitioner's challenge to the order of assessment would necessarily have the element of challenge on merits. This would be in addition to the Petitioner's contention regarding invalid service of notices. Any challenge to the order of assessment on merits should be ordinarily allowed to be examined by the Commissioner Appeals in whom statutory appellate powers have been vested under the Act. Lastly, the Petitioner has not even formally challenged the assessment orders. The Petitioner has filed the Petition straight away contending that it did not have copies of assessment orders, neither the order dated 07/03/2019. Therefore it had asked the department to produce copies of such orders, which along with affidavit-in-reply, have been filed. The Petitioner has not sought any amendment to the Petition bringing formal challenge to ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 25 / 29 05-WPL-992-19.odt such assessment orders. However, this is a purely technical ground and is mentioned only for the purpose of bringing the correct stage of the pleadings on record. Otherwise, this is not a prime ground on which we propose to relegate the Petitioner to appellate remedy.
11. This brings us to the Petitioner's later challenge to the auction proceedings. Our approach to the such challenge and ultimate conclusions must be based on facts of the case. In this context, the peculiar facts are that the Petitioner has primarily challenged the auction on the ground that the assessments giving rise to the tax dues, are invalid. Petitioner's second limb of argument is that the paintings and artworks put to auction are not of the ownership of the Petitioner. Significantly, the Petitioner has not questioned the valuation of the upset price, on which such paintings and artworks are offered for auction to general public. In the context of the evidence on record, regarding first ground, we have in the earlier portion of the order held that the writ petition would not be entertained and ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 26 / 29 05-WPL-992-19.odt the Petitioner was instead relegated to Appellate remedy. As of now, the Petitioner has no protection against assessment order.
12. Coming to the Petitioner's ground of ownership of the paintings and artworks, the peculiar facts are that the department has prima facie material of the Petitioner's ownership. Department has produced documents showing that such paintings and artworks were stored by the Petitioner at the warehouse. The statements of representatives of the warehouse have been recorded suggesting that the paintings and artworks are stored by the Petitioner, that the Petitioner is paying the bills for the same. As against this, the Petitioner has not produced even prima facie evidence suggesting that its ownership is limited only to 19 of these paintings. Counsel for the Petitioner has stated that because of inadequate excess to records, the Petitioner was prevented from bringing any such material on record. In this context, we may refer to the communication dated 23/03/2019, in which Petitioner had conveyed through its legal representative details of 19 paintings and artworks, which ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 27 / 29 05-WPL-992-19.odt according to the Petitioner belong to the Petitioner and that the rest do not. This list contains precise details of each painting. When the Petitioner was therefore able to supply such details with respect to 19 of these paintings, we wonder why the Petitioner could not provide some additional material showing the ownership being confined to these paintings as also some prima facie reason what was the occasion for the Petitioner to have the rest of the paintings stored at the warehouse at its cost. Through the proposed auction and thereafter, the present litigation has received wide publicity, no one has come forward claiming ownership of the remaining paintings. The Petitioner therefore in our opinion cannot take shelter under this ground.
13. It is true that the Petitioner has also raised ground of inadequate or incomplete service of attachment and auction proceedings. However, the entire case of the Petitioner to oppose the auction, as noted revolves around two elements; namely invalid assessment orders and questionable ownership of the paintings and artworks. We have dealt with both these ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 28 / 29 05-WPL-992-19.odt aspects and therefore do not find it appropriate to either set aside or quash the auction proceedings on this ground.
14. We may also add that the Petitioner is in the business of buying and selling paintings and artworks. The Petitioner does not claim any particular attachment over any of the painting or artwork. As noted earlier, the Petitioner has not challenged the valuation of these articles. Under such circumstances, even if the Petitioner were to ultimately succeed in Appeal proceedings, the amount recovered by the tax department through auction sale, can always be returned to the Petitioner with interest. In other words, by not interfering at this stage, we have not put the Petitioner to any irreversible situation. If the Petitioner ultimately succeeds in Appeal, subject to further Appeals the department would undoubtedly have to return the sale proceeds received through the auction.
Learned Counsel for the Petitioner has referred to several judgment in support of her contentions. These judgments mainly touch in the aspect of valid service of notice and ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 ::: 29 / 29 05-WPL-992-19.odt resignation of a Director of the Company. However, since we have not finally decided either of these issues, it is not necessary to dwelve into these judgments.
15. Under such circumstances, both the prayers of the Petitioner are refused. However, it is provided that if the Petitioner files Appeals against the assessment orders, latest by 20/04/2019, the Appellate Commissioner shall hear such Appeals on merits, without reference to the limitation. We clarify that all the contentions of both the sides, in relation to such orders of assessment including the question of validity of assessment notices, are kept open. Petition is disposed of.
16. At this stage, learned Counsel for the Petitioner states that the interim arrangement provided in order dated 27/03/2019, be continued for a short period, to enable the Petitioner to avail of further remedies. In facts of the case, the request is refused.
(SARANG V. KOTWAL, J.) (AKIL KURESHI, J.) ::: Uploaded on - 08/04/2019 ::: Downloaded on - 05/04/2020 10:05:34 :::