Delhi High Court
Sh. Sanjeev Bhaskar vs Assistant Collector, Recovery & ... on 31 March, 2011
Author: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 31st March, 2011.
+ W.P.(C) 2177/2011 & CM No.4625/2011 (for stay)
% SH. SANJEEV BHASKAR ..... Petitioner
Through: Ms. Kirti Mishra, Adv.
Versus
ASSISTANT COLLECTOR, RECOVERY
& ANR ..... Respondents
Through: Mr. H.C. Bhatia, Adv.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may No
be allowed to see the judgment?
2. To be referred to the reporter or not? No
3. Whether the judgment should be reported No
in the Digest?
RAJIV SAHAI ENDLAW, J.
1. The writ petition impugns the Demand dated 24th March, 2011
issued by the respondent no.1 Assistant Collector to the petitioner with
respect to the arrears of approximately `12 lacs of sales tax pertaining to
the assessment year 1983-84 of M/s Ishwar Industries Ltd. and warning the
petitioner that upon non-payment thereof, the amount shall be recovered by
arrest and attachment of the properties of the petitioner.
2. The petitioner claims that though earlier he was interested in the said
M/s Ishwar Industries Ltd. but was in the relevant year not a Director of
the said Company and the recovery of the dues if any of the said Company
cannot be made from him. It is further his case that under the inter se
settlement between various constituents of the said Company also, he is
not so liable.
3. The counsel for the respondent no.1 and respondent no.2 Assessing
Authority of Sales Tax, appears on advance notice.
4. The procedure with respect to the recovery of amounts as arrears of
land revenue has recently been the subject matter of judgment dated 14 th
March, 2011 in W.P.(C) No.1598/2011 titled P.C. Aggarwal Vs. GNCTD.
The Respondent no.1 Assistant Collector is not competent to adjudicate the
questions as raised by the petitioner as to his liability. The Respondent
no.1 Assistant Collector is to, upon the demand remaining unpaid, arrest
the alleged defaulter and to hear him on the aspect whether his detention
will compel recovery or not. The questions as raised by the petitioner are
to be adjudicated by the authority which has issued the Recovery
Certificate which is being executed by the respondent no.1 Assistant
Collector.
5. It has as such been enquired from the counsel for the respondents as
to which is the authority issuing the Recovery Certificate.
6. The counsel for the respondents has invited attention to Section 25
of the Delhi Sales Tax Act, 1975 particularly to sub-section (7) thereof
providing that the amount of tax or penalty in respect of which the dealer
or person is in default is recoverable as arrear of land revenue. He has
further invited attention to Rules 26A & 27 of the Delhi Sales Tax Rules,
1975 prescribing the procedure for issuance of the Recovery Certificate.
Therefrom it is contended that it is the Assessing Officer of the Sales Tax
who issues the Recovery Certificate.
7. Since it is the contention of the petitioner that he has never been
heard, it has been further enquired from the counsel for the respondents as
to whether any opportunity of hearing was given to the petitioner before
issuance of the Recovery Certificate. The counsel states that notice was
issued to one Mr. Ashish Bhaskar, Director of the said Company and who
submitted a reply containing a list of Directors at the relevant time and in
which the name of the petitioner was also mentioned. It is stated that
Recovery Certificates against all the persons so disclosed in the said list to
be the Directors were issued.
8. From the aforesaid it is borne out that no opportunity has been given
to the petitioner by the Assessing Officer who has issued the Recovery
Certificate being executed by the Respondent no.1 Assistant Collector, till
now.
9. In the aforesaid circumstances, no purpose will be served in keeping
the present writ petition pending. The same is disposed of with the
following directions:-
(i) The petitioner to appear before the Assessing Authority
concerned of Ward-87, Department of Trade & Taxes, 9th Floor,
Vyapar Bhawan, I.P. Estate, New Delhi on 20th April, 2011 at 1100
hours in the morning and on such subsequent dates as may be
given/necessary with all documents to show his involvement/non-
involvement in the aforesaid M/s Ishwar Industries Ltd. in the
Financial Year 1983-84 to which the demand is stated to relate.
(ii) The Assessing Officer after so hearing the petitioner shall
pass a speaking order justifying the liability if any of the petitioner
and recording the reasons if holding the petitioner liable for the
arrears with respect to that year.
(iii) The aforesaid order shall be passed on or before 31 st May,
2011.
(iv) Till then the proceedings by the Assistant Collector against
the petitioner shall remain suspended.
(v) If the Assessing Officer holds the petitioner liable, the
Recovery Certificate already issued will be executable thereafter.
However, in the event of the Assessing Officer after hearing the
petitioner, holding the petitioner to be not liable for the arrears, the
Recovery Certificate issued in the name of the petitioner shall stand
quashed.
No order as to costs.
Copy of this order be given Dasti under signature of the Court
Master.
RAJIV SAHAI ENDLAW
(JUDGE)
MARCH 31, 2011
bs
