Bombay High Court
Tapadiya Construction Ltd ... vs The Union Of India And Another on 1 February, 2023
Bench: Mangesh S. Patil, S. G. Chapalgaonkar
1 915-WP-14748-2019
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
915 WRIT PETITION NO.14748 OF 2019
TAPADIYA CONSTRUCTION LTD
THROUGH AUTHORIZED PERSON AND ANOTHER
VERSUS
THE UNION OF INDIA AND ANOTHER
...
Advocate for Petitioners : Mr Subodh P. Shah
Standing Counsel for Respondent No. 1 : Mr R.R. Bangar
Advocate for Respondent No. 2 : Mr D.S. Ladda
CORAM : MANGESH S. PATIL AND
S.G. CHAPALGAONKAR, JJ.
DATE : 01-02-2023
PER COURT :
1. Heard.
2. The petitioners have been served with a demand notices dated
8 January 2019 and 30 January 2019 by the respondents seeking to
enforce the outstanding dues to the tune of Rs. 60.00 lakhs and above
stated to be payable by the petitioners. The petitioner No.1 has purchased
the secured assets of sugar factory in an auction conducted by the creditor
bank under the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002.
3. In a different matter in respect of liability of the purchaser of the
immovable properties/secured assets as distinguished from the business
in respect of liability of the purchaser to pay the sales tax, the issue has
been referred to the Larger Bench by the order dated 25 November 2021,
2 915-WP-14748-2019
in Writ Petition Stamp No.29668/2019, which reads thus -
1. The petitioner is the purchaser of a secured
asset which was put to action under the Security Interest
(Enforcement) Rules, 2002. After such purchase, he has
received notices from the Sales Tax authorities that the
previous owner had not paid the tax dues and that the
petitioner is required to clear the same.
2. Several decisions of coordinate Benches of this
Court have been cited by Mr shah, learned advocate for
the petitioner, viz. (i) Siddhi Sugar and Allied Industries
Ltd., Latur Vs. State of Maharashtra and others; (ii)
Runwal Constructions vs. Union of India; (iii) Bhaurao
Chavan Sahakari Sakhar Karkhana Ltd. vs. State of
Maharashtra and others; (iv) M/s. Ghrushnewar
Sugars Pvt. Ltd. vs. Union of India and others; (iv)
Gharkul Industries Pvt. Ltd. And another vs.
Superintendent Central Excise Range and others and
(vi) State Bank of India vs. State of Maharashtra,
wherein it has been held that if the Sales Tax authorities
despite taxes being due from the owners of the secured
assets fail to object to the secured assets being put to
auction upon public notice being issued, the auction
purchasers are not liable to pay such dues.
3. Mr. Shah has also very fairly brought to our notice the
decision in Medineutrina Pvt. Ltd. vs. District Industries
Centre (D.I.C.) and others wherein a discordant note has
been struck by another coordinate Bench, without,
however, considering the decisions referred to in the
preceding paragraph.
4. In such view of the matter, it is necessary that the writ
petition be referred for decision by a larger Bench for an
answer to the following question:
whether an auction purchaser can be made liable to pay
the tax dues, in respect of a secured asset which is put to
auction on "as is where is basis", of which he alleges he
had no prior information, after confirmation of the sale and
issuance of the sale certificate in his favour?
5. This writ petition be placed before the Chief Justice on
administrative side for appropriate order.
4. This Court has noticed that there are catena of Judgments
reflecting on the liability of the purchaser of the auction of secured assets
3 915-WP-14748-2019
to pay sales tax holding that the purchasers would not be liable, albeit,
there is a discordant note struck by another coordinate Bench, without,
however, considering the decisions referred to in the preceding paragraph.
5. In this view of the matter, issue notice to the respondents,
returnable on 15-03-2023.
6. The learned Standing Counsel waives notice for respondent
No.1 and Mr Ladda, learned advocate waives notice for respondent No.2.
7. Till the next date, there shall be interim relief in terms of prayer
clause (B).
[ S.G. CHAPALGAONKAR, J. ] [ MANGESH S. PATIL, J. ]
mta
