Bombay High Court
Punjab National Bank, Nagpur ... vs State Of Maharashtra Through Its ... on 26 September, 2016
Bench: V.A. Naik
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
WRIT PETITION NO.6061 OF 2015
Punjab National Bank, a Body Corporate,
duly constituted under the provisions of
the Banking Provisions of the Banking
Companies (Acquisition and Transfer of
Undertakings) Act, 1980 having its Head
Office at 7, Bhikaji Kama Place, New Delhi
- 110 006 and one of its Branch inter alia
at Asset Recovery Management Branch,
near Railway Station, Kingsway, Nagpur,
through its Chief Manager/Power of
Attorney Holder, Shri Avinash Nayar. ... Petitioner
- Versus -
1) State of Maharashtra, through its
Secretary, Ministry of Finance and
Revenue, Mantralaya, Mumbai -
400 032.
2) Assistant Commissioner of Sales Tax
(Investigation)-II, Nagpur, 2nd
Floor, Vikrikar Bhavan, Civil Lines,
Nagpur - 440 001.
3) M/s. Linkson International Ltd.,
M/s. Linkson International Ltd.,
Regd. Office : B-103, Pushp
Heritage, B-Wing, Dhanukarwadi,
Mahavir Nagar, Mumbai - 400067,
through its Managing Director/
Director.
And
M/s. Linkson International Ltd.,
Head Office : 4th Floor, Poonam
Plaza, Palm Road, Civil Lines,
Nagpur - 440001, through its
Managing Director/Director.
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4) M/s. Linkson Ispat & Energies Pvt.
Ltd,. Regd. Office : B-103, Pushp
Heritage, B-Wing, Dhanukarwadi,
Mahavir Nagar, Mumbai - 400067,
through its Managing Director/
Director.
And
M/s. Linkson Ispat & Energies Pvt.
Ltd., Head Office, 4th Floor, Poonam
Plaza, Palm Road, Civil Lines,
Nagpur - 440 001, through its
Managing Director/Director
And
M/s. Linkson Ispat & Energies Pvt.
Ltd., B-117, MIDC, Industrial Area,
Butibori, District Nagpur, through its
Managing Director/Director.
And
M/s. Linkson Ispat & Energies Pvt. Ltd.,
D-30, 31, 32, MIDC, Industrial Area,
Butibori, District : Nagpur, through
its Managing Director/Director.
5) M/s. Linkson Coal & Minerals Pvt. Ltd.,
4th Floor, Poonam Plaza, Palm Road,
Civil Lines, Nagpur-1,
Add: Plot No.300, N.C. Road, Chitnis
Marg, Civil Lines, Nagpur, through
its Managing Director/Director.
6) M/s. Linkson Projects & Infrastructure
P. Ltd., 4th Floor, Poonam Plaza,
Palm Road, Civil Lines, Nagpur-440 001,
Add : Plot No.300, N.C. Road, Chitnis
Marg, Civil Lines, Nagpur, through its
Managing Director/Director.
7) M/s. Linkson International Club and
Resorts Private Limited, registered
Office at B-103, Pushp Heritage,
Dhanukar Wadi, Mahavir Nagar,
Kandiwali (West), Mumbai - 400 067,
through its Managing Director/Director.
Also at : 4th Floor, Poonam Plaza,
Palm Road, Civil Lines, Nagpur-440001,
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through its Managing Director/Director.
8) M/s. Trimurti Commercial Pvt. Ltd.,
4th Floor, Poonam Plaza, Palm Road,
Civil Lines, Nagpur - 440 001,
Add : Plot No.300, N.C. Road,
Chitnis Marg, Civil Lines, Nagpur,
through its Managing Director/Director.
9) M/s. Lyra Housing Aned Finance Pvt. Ltd.,
Add : Plot No.300, N.C. Road, Chitnis
Marg, Civil Lines, Nagpur, through its
Managing Director/Director.
M/s. Lyra Housing Aned Finance Pvt. Ltd.,
Add : 4th Floor, Poonam Plaza, Palm Road,
Civil Lines, Nagpur, through its Managing
Director/Director. ... Respondents
-----------------
Shri M.Y. Wadodkar, Advocate for petitioner.
Shri A.V. Palshikar, Assistant Government Pleader for respondent nos.1
and 2.
Shri R. Vyas, Advocate for respondent nos.3 to 9.
----------------
CORAM : SMT. VASANTI A NAIK AND
KUM. INDIRA JAIN, JJ.
DATED : SEPTEMBER 26, 2016
ORAL JUDGMENT (PER SMT. VASANTI A NAIK
, J.) :
Rule. The rule is made returnable forthwith. The writ
petition is heard finally at the stage of admission with the consent of the
learned Counsel for the parties.
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By this writ petition, the petitioner - Punjab National Bank has
challenged the auction notice dated 5/10/2015 published by the
respondent no.2 - Assistant Commissioner of Sales Tax (Investigation)-II,
Nagpur.
According to the petitioner Bank, the respondent no.2 could
not have attached the secured assets of the petitioner Bank for recovering
the sales tax dues of the respondent nos.3 to 5. It is submitted that only
the respondent nos.3 to 5 are liable to pay the sales tax dues and the
respondent no.2 could have been entitled to auction the properties of the
respondent nos.3 to 5 only. It is submitted that the respondent nos.6 to 9
have mortgaged their properties with the petitioner Bank towards the loan
secured by them. It is submitted that the properties of the respondent
nos.6 to 9 could not have been put to sale by the auction notice as the said
action would deprive the petitioner Bank of securing the dues from the
respondent nos.6 to 9. It is stated that the issue involved in this case
stands answered in favour of the petitioner Bank by the judgment dated
3/8/2016 in Writ Petition No.669/2016 wherein this Court has quashed a
part of the auction notice by which the properties that were mortgaged
with the Union Bank of India were deleted from the auction notice as the
concerned respondents were not liable to pay the sales tax dues.
Shri Palshikar, the learned Assistant Government Pleader for
the respondent nos.1 and 2, does not dispute that the issue involved in
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this case stands answered in favour of the petitioner by the judgment
dated 3/8/2016 in Writ Petition No.669/2016. It is, however, stated that
the petitioner is not correct in stating that the respondent no.6 is not liable
to pay the sales tax or value added tax dues. It is stated that the
respondent no.6 has not paid the dues towards the value added tax to the
tune of Rs.23,20,000/-. It is, however, admitted that no dues are payable
by the respondent nos.7 to 9 to the Sales Tax Department. It is stated that
only certain amount is due and payable by the respondent nos.7 to 9
towards profession tax and the amount payable is Rs.25,000/- by each of
the respondent nos.7 to 9.
On hearing the learned Counsel for the parties, it appears that
the issue involved in this case stands answered in favour of the petitioner
by the judgment dated 3/8/2016 in Writ Petition No.669/2016.
Admittedly, no sales tax or value added tax dues are payable by the
respondent nos.7 to 9. It is stated on behalf of respondent nos.1 and 2
that the value added tax dues are liable to be paid by the respondent no.6
to the extent of Rs.23,20,000/-. If the sales tax or value added tax dues
are not payable by the respondent nos.7 to 9, the respondent no.2 cannot
attach and sell the properties of the respondent nos.7 to 9. An identical
issue came up for consideration in Writ Petition No.669/2016 and after
hearing the learned Counsel for the parties, this Court held that the Sales
Tax Department could not have attached the properties of the Companies
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that had not defaulted in payment of the tax dues. In the instant case, the
respondent nos.7 to 9 have mortgaged their properties with the petitioner
Bank while securing the loan, that are included in the auction notice. If
that be so, the petitioner would be greatly aggrieved if the properties that
are mortgaged by the respondent nos.7 to 9 with it, are sold by the Sales
Tax Department, though the sales tax or value added tax dues are not
payable by them.
Even if the respondent nos.7 to 9 are liable to pay the dues
towards profession tax, their properties cannot be auctioned and put to
sale by the Assistant Commissioner of Sales Tax. As per Section 11 of the
Maharashtra State Tax on Professions, Trades, Callings and Employments
Act, 1975, all the arrears of tax, penalty, interest and fees shall be
recoverable as arrears of land revenue. The procedure for recovering the
dues as arrears of land revenue is provided under the Maharashtra Land
Revenue Code, 1966. The said procedure is not adopted in this case and
the properties of the respondent nos.7 to 9 are put to auction by the
respondent no.2, which is not permissible. Section 11 of the Act of 1975
would not permit the Sales Tax Department to auction the properties of
the respondent nos.7 to 9 for recovery of profession tax dues as they are
recoverable only as arrears of land revenue. In a given case, we find that
by not paying the profession tax for a year or two, a debtor of the Bank
may try to defraud the Bank, if the procedure that is liable to be adopted
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as per provisions of Section 11 of the Act of 1975 is given up and the Sales
Tax Department is permitted to auction the properties.
Hence, for the reasons recorded hereinabove and also for the
reasons recorded in the judgment dated 3/8/2016 in Writ Petition
No.669/2016, we partly allow this writ petition. The impugned auction
notice is quashed and set aside insofar as it relates to the properties of the
respondent nos.7 to 9. The properties of the respondent nos.7 to 9 that
are included in the auction notice and which are the secured assets of the
petitioner Bank, stand released from the order of attachment. The
petitioner is free to take up appropriate proceedings in view of the
provisions of Section 31-B of the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 in respect of the other properties that are
sought to be auctioned, if permissible in law.
Rule is made absolute in the aforesaid terms with no order as
to costs.
JUDGE JUDGE
khj
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CERTIFICATE
I certify that this judgment uploaded is a true and correct
copy of the original signed judgment.
Uploaded by : Uploaded on :
Kamal H. Jeswani 29/9/2016
Private Secretary
