Gujarat High Court

Kantaben Dharamshi Kalariya vs State Of Gujarat on 16 October, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

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                            C/SCA/15654/2022                              JUDGMENT DATED: 16/10/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                      R/SPECIAL CIVIL APPLICATION NO. 15654 of 2022


                       FOR APPROVAL AND SIGNATURE:


                       HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                       and
                       HONOURABLE MR. JUSTICE PRANAV TRIVEDI
                       ==========================================================

                                    Approved for Reporting               Yes            No
                                                                                    ✔
                       ==========================================================
                                           KANTABEN DHARAMSHI KALARIYA & ORS.
                                                         Versus
                                                STATE OF GUJARAT & ORS.
                       ==========================================================
                       Appearance:
                       HIREN J TRIVEDI(8808) for the Petitioner(s) No. 1,2,3,4,5
                       MS. SHRUNJAL SHAH, ASSISTANT GOVERNMENT PLEADER for the
                       Respondent(s) No. 1,2,3,4
                       NOTICE SERVED BY DS for the Respondent(s) No. 5
                       ==========================================================

                         CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                               and
                               HONOURABLE MR. JUSTICE PRANAV TRIVEDI

                                                     Date : 16/10/2025

                                            ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)

1. Heard learned advocate Mr. Hiren Trivedi for the

petitioners and learned Assistant Government Pleader Ms.

Shrunjal Shah for the respondents.

2. Rule returnable forthwith. Learned Assistant Government

Pleader Ms. Shrunjal Shah waives service of notice of Rule for

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the respondent.

3. Having regard to the controversy arising in this petition

which is in narrow compass, this matter is taken up for hearing

with the consent of learned advocates for both the parties.

4. By way of present writ-petition preferred under Article

226 of the Constitution of India, the petitioner seeks prayer and

directions to respondent authorities to lift and withdraw the

attachment created by respondent No.5 (hereinafter referred to

as 'the respondent' for short) under the Gujarat Value Added

Tax Act, 2003 (hereinafter referred to as 'the Act') on property

at regular Survey No. 31, Village: Trajpar, Taluka & District:

Morbi (hereinafter referred to as 'the property' for short) owned

by the petitioner.

6. The brief facts of the case are as under:

5.1. The property was purchased by Shri Dharamshi Nandlal

Patel (HUF) (hereinafter referred to as 'the HUF" for short)

vide registered sale deed dated 26.2.1998. Subsequent to

acquiring of the property, the HUF leased the property to one

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M/s. Radiant Floor Tiles Private Ltd., on annual lease of Rs.

50,000/- from 31.1.2004 for a period of 30 years. The Company

to whom the lease was granted, was a dealer as specified under

the provisions of the Act. Initially the Karta of the HUF of the

property herein were Directors of the Company. Thereafter, the

name of the Company was changed from Radiant Floor Tiles

Pvt. Ltd. to Laurent Tiles Private Limited by issuance of fresh

Certificate of Incorporation of Company issued by the Registrar

of Companies on 4.4.2013. The Company had outstanding dues

from A.Y. 2007-08 to 2012-13, 2016-17 and 2017-18, totalling to

Rs.26,71,56,973.95/- .

5.2 Owing to the dues of the Company, notice was issued on

11.6.2015 for attaching the property as well as proposing to

auction the sale. The notice specifically stated that the Company

had not paid the outstanding dues despite of service of notice

under Section 152 and Section 200 of the Gujarat Land Revenue

Code, 1972. In view of the said fact, the petitioners who are

members of the HUF obtained the copy of the Village Form No.

7/12 on 9.9.2016 and found that there was an attachment

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created by the respondent under the provisions of the Act.

However, Karta of the HUF i.e. Dharamshi Nandlal Patel

expired on 5.1.2018 and the petitioners jointly applied for

mutation of heirship entry in the record of rights for the land in

question. The respondent authorities were aware about the

heirship that was created on the property, which was interse

communicated between the respondent authorities on

6.11.2019. In wake of such submissions, it was communicated

by the respondent that a huge amount is outstanding and since

petitioner No.4 was Director of the Company, he was liable for

the dues of the Company and, therefore, mutation and heirship

entry was objected by the State Tax Department. In wake of

such facts, the petitioners communicated to the Department on

18.6.2022 that the respondent cannot hold the petitioners liable

for the dues of the Company and property of the petitioners

cannot be attached or auctioned under the provisions of the Act.

Attention of the authorities was drawn towards to the fact that

land in question is not of the ownership of the Company and,

therefore, recovery cannot be made from the Director of the

Company. In view of such facts, it was requested to withdraw

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the attachment notice. However, despite the communication

made by the petitioners, the respondent authorities have not

lifted the attachment, which has led to filing of the present writ

petition.

6. Learned advocate Mr. Hiren Trivedi for the petitioner has

submitted that the impugned actions of respondent no.2 to

attach the land in question and requesting to mutate an entry of

charge for recovery of alleged dues in the case of the Company

is wholly without jurisdiction, bad and illegal. The land in

question never belonged to the Company and was of the

ownership of the HUF and thus no charge can be created over

such land in question and such land cannot be attached.

6.1 Learned advocate Mr. Trivedi has further submitted that

the Company and its Directors being separate legal entities, the

liability of the Company to pay VAT cannot be fastened on the

Directors personally or on the personal properties of the

Directors, in absence of any provision to that effect under the

VAT Act.

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6.2 Learned advocate Mr. Trivedi for the petitioner further

submitted that from the scheme of the VAT Act, it is clear that it

is only the property of defaulting dealer which can be attached

under sections 45, 46 and for garnishee notice for the purpose

of section 44 to the persons who owes certain money to dealer

and not any other person except for dealer.

6.3 Learned advocate Mr. Trivedi further submitted that levy

and collection of tax must be with the authority of law by virtue

of Article 265 of the Constitution and in absence of any

determinative provisions under the Sales Tax Act, 1969 for

enabling recovery in the hands of the director for dues of the

Company, the impugned notice is completely illegal without

jurisdiction.

6.4 It was further submitted that Chapter VI of the Act

provides for liability to pay tax in certain cases and covers

several contingencies such as the liability in respect of the

business carried on by an individual dealer after his death, the

liability in respect of the dues where the dealer was an HUF and

there is partition amongst various members or group of

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members; there is dissolution of a partnership firm and also in

case of transfer of business in whole or in part. Unlike Section

179 of the Income-tax Act, 1961, there is no provision in the Act

fastening the liability of the Company to pay its VAT and CST

dues on its Directors.

6.5 Learned advocate Mr. Trivedi further submitted that

Section 46 is with respect to the special powers of the tax

authorities for recovery of tax as arrears of land revenue.

Section 46 makes it abundantly clear that the recovery of the

amount of tax, penalty or interest should be due from any dealer

or other person by or under the provisions of the Act, 2003 or

under any earlier law. It was submitted that Dharamshi Nandlal

Patel (HUF) is not a dealer from whom any tax is to be

recovered under the provisions of the Act, 2003. It was

submitted that Dharamshi Nandlal Patel (HUF) will also not fall

within the ambit of the words "other person". It was stated that

the land, which has been proposed to be attached, is of the

ownership of the Dharamshi Nandlal Patel (HUF) and the same

has been taken on lease by the company, i.e, the defaulting

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dealer. Dharamshi Nandlal Patel (HUF), being the owner of the

land, is the lessor, whereas the company is the lessee. It was

stated that power of attachment can be exercised only if the

dealer has defaulted in the payment of the tax and such tax

along with penalty or interest can be recovered by attaching the

property of such dealer.

7. Per contra, learned Assistant Government Pleader Ms.

Shrunjal Shah for the respondents placing reliance on the

affidavit-in-reply has stated that the petitioner Nos. 2 and 4 are

the Directors of the Company. The petitioner No.2 being eldest

son of Dharamshi Nandlal Patel, is serving as Karta of

Dharamshibhai Nandlal Patel ( HUF) after the death of

Dharamshi N. Patel on 5.1.2018, has been joined as petitioner

No.4 as Karta of the HUF, the person who is also Karta of the

HUF whose dues are pending under the provisions of Act.

Therefore, indirectly they are related to the dues of the

Company itself. It was further submitted that the Company was

indirectly managed and controlled by the members of the HUF

and the Company has defaulted in making payment of the dues

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under the Act. The total dues of the Company are as under:

Sr. Dealer Tax Status Originat Amount Order Arrear Paymen Type Period ed from as per Served in Rs. t Recd AO in Date in Rs.

Rs.

1. CST 01- Closed Refund 16,16,5 14/03/2 0.00 18,82,85

2006- Recove 31 Mar ry

2. VAT 01- Stay Reasse 80,62,4 31/03/2 2,35,64 0.00 April- Order ssment 12.00 012 ,773.62 2007- 31.03.2 31 Mar 012

3. CST 01- Stay Reasse 18,03,0 31/03/2 5,15,05 11,48,62 April- Order ssment 188.00 012 ,450.69 6 2007- 31.03.2 31 Mar 012

4. CST 01- Stay Audit 151472 09/05/2 3,97,17 15,00,00 April- Order Assess 41.00 013 ,095.24 0 2008- 09.05.2 ment 31 Mar 013

5. VAT 01- Sine Audit 5124.0 28/04/2 6227.8 5200 April- Die Assess 0 014 9 2009- Adjourn ment 31 Mar ed 2010 without stay

6. CST 01- Stay Audit 162780 28/04/2 3,77,95 31.00,00 April- Order Assess 83.00 014 ,532 0 2009- 27.09.2 ment 31 Mar 022

7.1 According to learned Assistant Government Pleader Ms.

Shah, the entire proceedings of the Company which was

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managed and controlled by the petitioner Nos.2 and 4 was

pending before the authority. There were no other Directors or

external equities who were invited to run the business of the

Company. Therefore, the Company being run by petitioner Nos.

2, 4 and 5 the Corporate veil is required to be lifted. In wake of

such submissions, learned Assistant Government Pleader has

submitted to dismiss the petition.

8. Having heard the learned advocates for the respective

parties and having perused the material on record, the short

question that arises for consideration is whether the property of

the HUF which was leased to the Company from whom tax dues

are pending, can be attached or auctioned by the Department.

However, this dispute is no more res integra by catena of

decisions of this Court.

8.1 This Court in a decision in case of Veer Industries Ltd. v.

The Commercial Tax Officer (4), rendered in Special Civil

Application No. 13718 of 2018 has decided as under:

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ANALYSIS

12. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the immovable property of the ownership of the writ applicant could have been attached for the purpose of recovering the dues payable by the respondent No.3 under the Act, 2003.

13. Before adverting to the rival submissions canvassed on either side, we must look into few relevant provisions of the Act, 2003.

14. Clause 2(10) of the Act, 2003 defines the word 'dealer'.

The same reads as follows:-

"dealer" means any person who, for the purpose of or consequential to his engagement in or, in connection with or incidental to or in the course of his business buys, sells, manufactures, makes supplies or distributes goods, directly or otherwise, whether for cash or deferred payment, or for commission, remuneration or otherwise and includes,-

(a) the Central Government or a State Government or any local authority such as municipality or municipal corporation or panchayat, a statutory authority, a company, a partnership firm, a Hindu Undivided Family or any society, club, association or body, incorporated or not, of persons which carries on business;

(b) a casual dealer, that is to say, a person who whether as principal, agent or in any other capacity, undertakes occasional transaction of a business nature in any exhibition-cum-sale or auction or otherwise in the State,

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whether for cash, deferred payment, commission, remuneration or other valuable consideration;

(c) an auctioneer, who sells or auctions goods belonging to any principal whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of principal;

(d) a factor, broker, commission agent, del credere agent or an auctioneer or any mercantile agent, by whatever name called, who carries on business on behalf of any principal whether disclosed or not;

(e) any person who transfers, otherwise than in pursuance of a contract, property in any goods for cash, deferred payment or other valuable consideration;

(f) any person who transfers property in goods (whether as goods or in some other form) involved in the execution of a works contract;

(g) any person who delivers goods on hire purchase or any system of payment by installments;

(h) any person who transfers the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;

and

(i) any person who supplies, by way of or as part of any service or in any other manner whatsoever, goods being food or any other article for human consumption or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration.

Explanation.-- (i) A society (including a co-operative society), club or firm or an association, which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, from or to its members or other persons for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the

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purposes of this Act.

(ii) The Central Government or a State Government or a local authority or railway administration or port trusts or a statutory body, which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act.

(iii) Any person or body, which disposes of any goods including unclaimed, confiscated, unserviceable, scrap, surplus, old, obsolete, discarded, waste or surplus product or goods, whether by auction or otherwise, directly or through an agent, for cash deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act.

Exceptions.-- The following shall not be deemed to be a dealer within the meaning of this clause, namely:-

(i) an agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally;

(ii) an individual who sells exclusively any fish or any sea-

food caught by him personally or by any member of his family on account of or on behalf of such individual; and

(iii) a charitable, religious or educational institution, carrying on the activity of manufacturing, buying, selling or supplying goods, in performance of its functions, for achieving its avowed objects, which are not in the nature of business."

15. The word "person" is defined in clause (15) of the Act, 2003. The same reads as under;

"(15) "person" includes an individual, a joint family or Hindu Undivided Family, a company, a firm, an association of persons or body of individuals, whether

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incorporated or not, a society, club or other institution, a local authority, the Central Government or a State Government and every artificial juridical person not falling within any of the preceding descriptions;"

16. Section 42 of the Act, 2003 provides for the payment and recovery of tax and interest on delayed payment. The same reads thus:-

"42. Payment and recovery of tax and interest on delayed payment.

(1) The amount of tax assessed, reassessed or becoming payable for any period under section 32, 33, 34, 35, 75 or 79, less any amount already paid by the dealer in respect of such period, shall together with penalty and interest if any that may become payable under any of the provisions of this Act, be paid by the dealer or the person liable therefor into a Government treasury or in such other manner as may be prescribe d within thirty days from the date of service of notice of demand issued by the Commissioner for this purpose.

(2) On an application by the dealer, the Commissioner may in respect of any particular dealer or person and for reasons to be recorded in writing, extend the time for payment or allow payment by installments, subject to such conditions as he may think fit to impose in the circumstances of the case.

(3) In a case where payment by installments is allowed under subsection (2) and the dealer or the person liable for such payment commits default in paying any one of the installments within the time fixed by the Commissioner under that sub-section, the dealer or the person shall be deemed to be in default in respect of the whole of the amount then outstanding and the other installments shall be deemed to have been due on the same date as the installment in default.

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(4) Interest at the rate of eighteen per cent per annum shall be charged for the period as may be extended or the installments as may be granted under sub-section (2).

(5) If the amount of tax and penalty, if any, is not paid within the time specified in sub-section (1) or extended under sub-section (2), as the case may be, the dealer or the person liable therefor shall be deemed to be in default in respect of that amount.

(6) Where the amount of tax assessed or reassessed for any period, under section 34 or section 35, subject to revision, if any, under section 75, exceeds the amount of tax already paid by a dealer for that period, there shall be paid by such dealer, for the period commencing from the date of expiry of the time prescribed for payment of tax under sub-section (1), (2) or (3) of section 30 and ending on date of order of assessment, reassessment or, as the case may be, revision, simple interest at the rate of eighteen per cent per annum on the amount of tax not so paid or any less amount thereof remaining unpaid during such period.

(7) Where a dealer does not pay the amount of tax falling under subsection (1) on or before the prescribed date, then there shall be paid by such dealer for the period commencing on the specified date and ending on the date of payment, simple interest at the rate of eighteen per cent per annum on the amount of tax not so paid or any less amount thereof remaining unpaid during such period :

Provided that where security, other than in the form of surety bond, has been furnished by a dealer under sub- sections (1) and (2) of section 28, the Commissioner may, for good and sufficient reasons to be recorded in writing, realise any amount of tax, penalty or interest remaining unpaid as aforesaid or part thereof by ordering forfeiture of the whole or any part of the security."

17. Section 44 of the Act, 2003 provides for the special mode of recovery. The same reads as follows;

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"44. Special mode of recovery:-

(1) Notwithstanding anything contained in any law or contract to the contrary, the Commissioner may, at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the dealer at his last known address, require,--

(a) any person from whom any amount of monies is due, or may become due, to a dealer on whom notice has been served under sub-section (1), or

(b) any person who holds or may subsequently hold monies for or on account of such dealer, to pay to the Commissioner, either forthwith upon the monies becoming due or being held or within the time specified in the notice (but not before the monies becomes due or is held as aforesaid) so much of the monies as is sufficient to pay the amount due by the dealer in respect of the arrears of tax, penalty or interest under this Act, or the whole of the money when it is equal to or less than that amount.

Explanation.-- For the purposes of this sub-section, the amount of monies due to a dealer from, or monies held for or on account of a dealer by any person, shall be calculated by the Commissioner after deducting therefrom such claims, if any, lawfully subsisting, as may have fallen due for payment by such dealer to such person.

(2) The Commissioner may amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.

(3) Any person making any payment in compliance with a notice under this section shall be deemed to have made the payment under the authority of the dealer, and the receipt thereof by the Commissioner shall constitute a good and sufficient discharge of the liability of such person to the extent of the amount specified in the receipt.

(4) Any person discharging any liability to the dealer after

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receipt of the notice referred to in this section, shall be personally liable to the Commissioner to the extent of the liability discharged or to the extent of the liability of the dealer for tax, penalty and interest, whichever is less.

(5) Where a person to whom a notice under this section is sent objects to it by a statement in writing that the sum demanded or any part thereof is not due or payable to the dealer or that he does not hold any monies for or on account of the dealer, the Commissioner shall hold an inquiry and after giving to such person or dealer a reasonable opportunity of being heard, make such order as he thinks fit.

(6) Any amount of monies which the aforesaid person is required to pay to the Commissioner, or for which he is personally liable to the Commissioner under this section shall, if it remains unpaid, be recoverable as an arrears of land revenue.

(7) The Commissioner may apply to the court in whose custody there is monies belonging to the dealer for payment of the amount of such monies towards the outstanding amount of tax, interest and penalty payable by the dealer."

18. Section 45 provides for the provisional attachment. The same reads as follows;

"45.Provisional attachment:-

1) Where during the pendency of any proceedings of assessment or reassessment of turnover escaping assessment, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may by order in writing attach provisionally any property belonging to the dealer in such manner as may be prescribed.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1)."

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19. Section 46 is with respect to the special powers of the tax authorities for recovery of tax as arrears of land revenue.

"46. Special powers of tax authorities for recovery of tax as arrears of land revenue.

(1) For the purpose of effecting recovery of the amount of tax, penalty or interest due from any dealer or other person by or under the provisions of this Act or under any earlier law, as arrears of land revenue -

(i) the Commissioner, the Special Commissioner, Additional Commissioner and the Joint Commissioners shall have and exercise all the powers and perform all the duties of the Collector under the Bombay Land Revenue Code, 1879.

(ii) the Deputy Commissioners and Assistant Commissioners shall have and exercise all the powers (except the powers of arrest and confinement of a defaulter in a civil jail) and perform all the duties of the Assistant Collector or Deputy Collector under the said Code.

(iii) the Commercial Tax Officers shall have and exercise all the powers (except the powers of arrest and confinement of a defaulter in a civil jail) and perform all the duties of the Mamlatdar under the said Code.

(2) Every order passed in exercise of the powers conferred by subsection (1) shall, for the purpose of section 73, 75, 78, 79 or 94, be deemed to be an order passed under this Act."

20. Section 47 declares any transfer with the intent to defraud the revenue as void;

"47. Transfer to defraud revenue void:-

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"Where a dealer after any tax has become due from him creates a charge on or parts with the possession by way of sale, mortgage, exchange or any other mode of transfer whatsoever of any of his property in favour of any other person with the intention of defrauding the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer."

21. Section 48 clarifies that any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer or as the case may be, such person.

22. It appears from the materials on record that the impugned order passed by the respondent No.1 dated 23.1.2018 is one of provisional attachment as provided under Section 45 of the Act, 2003. Section 45 makes it very abundantly clear that during the pendency of any proceedings of assessment or reassessment and turnover, escaping assessment, the Commissioner, with a view to protect the interest of the Government Revenue, may by order in writing, attach provisionally any property belonging to the dealer. Section 45 further clarifies that such provisional attachment would cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1). Section 46 confers special powers to the tax authorities for recovery of the tax as arrears of land revenue.

23. To our understanding, more particularly, having

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regard to the scheme of the Act, 2003, Section 46 would come into play once the liability is assessed and final order is passed in that regard. For the purpose of effecting recovery of the amount of tax, penalty or interest as may be assessed by the authority, the Special Commissioner, Additional Commissioner and the Joint Commissioners under the Act, 2003 have been conferred with all the powers of the Collector under the Bombay Land Revenue Code. Thus, to put it simply, once the liability of the defaulting dealer is assessed and fixed, the next step would be to recover the requisite amount with penalty or interest. Such amount can be recovered by the authorities under the Act, 2003 by way of land revenue measures as provided under the Bombay Land Revenue Code.

24. From the aforesaid, two things are very amply clear. The property of the ownership of the defaulting dealer can only be provisionally attached. The language of the statute is very clear. Section 45 provides that "he may by order in writing attach provisionally any property belonging to the dealer". In such circumstances, in the first instance, the property which is of the ownership of the writ applicant could not have been attached for the purpose of recovery of the amount of tax, penalty or interest due and payable by the respondent No.3. It is not the case of the department that the writ applicant has defaulted, in any manner, with regard to payment of the tax under the Act, 2003. The argument of the learned

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AGP that the writ applicant would fall within the ambit of the words "other person" as figuring in Section 46 of the Act, 2003 deserves to be outright rejected. In what manner, the words "other person" figuring in section 46 should be understood, shall be explained by us a little later. However, we are sure of one thing that just because two directors, namely, Mr. Tarunkumar Jain and his wife Mrs. Darshana Tarunkumar Jain also happen to be the directors in the respondent No.3-Company, by itself, does not make the respondent No.3 the lawful owner of the property in question. The State should understand and appreciate that the property in question is of a legal entity, i.e, the Company registered under the Companies Act. Mr. Tarunkumar Jain and Mrs. Darshana Tarunkumar Jain are not the owners of the property in question. In their capacity as the directors of the Company, they cannot be said to be the owners of the land in question. The law is amply clear that even the dues of the private limited company cannot be recovered from the personal property of the director, if any, in the absence of any provisions to that effect in the Act, 2003. Be that as it may, the entire approach of the State Authorities in this regard is incorrect and not sustainable in law.

25. The writ applicant is the lawful owner of the attached land. The property, which has been attached, might have been given on lease to the respondent No.3, but by virtue of the same, it cannot be said that the property is of the ownership of the respondent No.3. The

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relationship is just of a lessor and lessee. The land, as on date, belongs to the writ applicant-Company.

26. Although, it is not necessary for us to look into and discuss the two judgments referred to and relied upon by Mrs. Pahwa, the learned counsel appearing for the writ applicant, we may refer and look into the same.

27. In Jwelly Tea Co. (supra), a Coordinate Bench of this Court had observed as under:-

"8 Another aspect of the matter is that the expression 'dealer' has been defined under section 2(10) of the Act to mean any person who, for the purpose of or consequential to his engagement in or, in connection with or incidental to or in the course of his business buys, sells, manufactures, makes supplies or distributes goods for cash or for commission, remuneration or otherwise, which means any person who satisfies the requirement of that sub-section. Sub-section (15) of section 2 of the GVAT Act defines person' to include an individual, a joint family or Hindu Undivided Family, etc. Therefore, the Act recognises a Hindu Undivided Family as a dealer and as a person. The legislature having treated a Hindu Undivided Family as a taxable entity, distinct from the individual members constituting it, it was not open for the appellant to attach the movable properties of an individual member. In this regard, reference may be made to the decision of the Supreme Court in the case of Kapurchand Shrimal v. Tax Recovery Officer, Hyderabad & Ors., AIR 1969 SC 682, wherein the court has held as under:

"5. The scheme of the Income-tax Act, 1961, is to treat the assessee failing to pay the tax due within the period prescribed a defaulter. The Income-tax Officer may, where the assessee is found to be in default, issue a certificate for recovery and forward it to the Tax Recovery

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Officer specifying the amount of arrears due from the assessee. The amount due may be recovered by resort to any one or more of the four modes prescribed by Sec. 222 of the Act. If the defaulter fails to comply with a notice issued by the Tax Recovery Officer requiring the defaulter to pay the amount within fifteen days from the date of the service of the notice, proceedings for recovery may be taken against the assessee for recovery of the tax. But under the scheme of the Act and the Rules, the assessee alone may be treated in default. The Act and the Rules contemplate that the notice for payment of the tax arrears may be issued against the assessee, and proceedings for recovery of the tax may be taken against the assessee alone. Under the Income-tax Act, 1961, a Hindu Undivided Family is a distinct taxable entity, apart from the individual members who constitute that family. Section 4 of the Income-tax Act charges to tax for any assessment year the total income of the previous year of every person and 'person' is defined in Section 2 (31) as including- (i) an individual, (ii) a Hindu undivided family,

(iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. The Legislature having treated a Hindu undivided family as a taxable entity distinct from the individual members constituting it, and proceedings for assessment and recovery tax having been taken against the Hindu undivided family, it was not open to the Tax Recovery Officer to initiate proceeding against the manager of the Hindu undivided family for his arrest and detention. It is true that if properties of the family, movable and immovable, are to be attached proceedings may be started against the Hindu undivided family and the manager represents the family in proceedings before the Tax Recovery Officer. But by the clearest implication of the statute the assessee alone may be deemed to be in default for non-payment of tax, and liability to arrest and detention on failure to pay the tax due is also incurred by the assessee alone.The manager by virtue of his status is competent to represent the Hindu undivided family, but on that account he cannot for the purpose of Section 222 of the Act of 1961 be deemed to be the assessee when

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the assessment is made against the Hindu undivided family and certificate for recovery is issued against the family."

9 Having regard to the principles enunciated in the above decision as well as in the light of the above discussion, this court is of the view that the Tribunal was wholly justified in holding that the property of the individual member of the Hindu Undivided Family could not be attached under section 45 of the GVAT Act. The impugned order passed by the Tribunal does not suffer from any legal infirmity so as to give rise to any question of law, much less a substantial question of law, warranting interference. The appeal, therefore, fails and is accordingly dismissed.

10 It may also be noted that the initial attachment order was for a period of six months. The learned Assistant Government Pleader has stated under instructions that the attachment has not been extended thereafter and hence, the attachment is no longer effective. "

28. The last part of the judgment, referred to above, is important. In the present case also, we take notice of the fact that the order of attachment is dated 23.01.2018. Nothing has been shown to us that on expiry of one year, the attachment has been extended thereafter. In substance, the attachment is no longer effective, as on date.

29. The ratio of the decision of this Court in Jwelly Tea Co. (supra) is that section 45 can be invoked by the authority concerned only if the property belongs to the dealer, i.e., the dealer as defined under section 2(10) of the Act, 2003. To put it in other words, the defaulting dealer.

30. In Pankaj Krishnavadan Mashruwala (supra), a

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Coordinate Bench of this Court had observed as under:-

"8. On a careful consideration of the submissions advanced by both the learned advocates for the parties as well as considering the settled legal position as stated hereinabove, and the documents produced on record, it is not in dispute that the property which is attached by the impugned notice is of the ownership of the petitioner No.1, who is the Director of the petitioner No.2 Company and therefore, as held by the Supreme Court in M. R. Chokshi v. State of Gujarat (supra), no attachment can be made. There is no provision in the Act fastening the liability of the Company to pay its sales tax dues to its Director and therefore, the impugned attachment notice dated 27.12.2017, is required to be quashed and set aside as the controversy in question is squarely covered by the above referred decision of this court. Other contentions raised by the learned advocates for the respective parties are not gone into in view of the settled position of law that the dues of the Private Limited Company cannot be recovered from the personal property of the Director in absence of any provisions to that effect in the Sales Tax Act. "

31. Ms. Mehta, the learned AGP laid much emphasis on the words "other person" figuring in Section 46 of the Act, 2003. The words "other person" should be read in context with Section 44 of the Act, 2003. Section 44 provides for the special mode of recovery. Section 44 reads thus:

"44. Special mode of recovery:-

(1) Notwithstanding anything contained in any law or contract to the contrary, the Commissioner may, at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the dealer at his last known address, require,--

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(a) any person from whom any amount of monies is due, or may become due, to a dealer on whom notice has been served under sub-section (1), or

(b) any person who holds or may subsequently hold monies for or on account of such dealer, to pay to the Commissioner, either forthwith upon the monies becoming due or being held or within the time specified in the notice (but not before the monies becomes due or is held as aforesaid) so much of the monies as is sufficient to pay the amount due by the dealer in respect of the arrears of tax, penalty or interest under this Act, or the whole of the money when it is equal to or less than that amount.

(2) The Commissioner may amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.

(4) Any person discharging any liability to the dealer after receipt of the notice referred to in this section, shall be personally liable to the Commissioner to the extent of the liability discharged or to the extent of the liability of the dealer for tax, penalty and interest, whichever is less.

(5) Where a person to whom a notice under this section is

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sent objects to it by a statement in writing that the sum demanded or any part thereof is not due or payable to the dealer or that he does not hold any monies for or on account of the dealer, the Commissioner shall hold an inquiry and after giving to such person or dealer a reasonable opportunity of being heard, make such order as he thinks fit.

32. In context of section 44, referred to above, the words "other person" means a person from whom any amount of money is due or may become due to a dealer on whom notice has been served under sub-section (1) or any person who holds or may subsequently hold money for or on account of such dealer. The writ applicant herein will not fall within the ambit of the words "other person".

33. One aspect which needs to be clarified is that only the land belongs to the writ applicant. What has been leased is the open land. The plant and machinery is of the ownership of the respondent No.3. There should not be any difficulty in attaching the plant and machinery of the ownership of the respondent No.3. However, the land of the ownership of the writ applicant could not have been attached.

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9. In wake of such legal position, the attachment created by

the revenue authority on the property in question which belongs

to the HUF could not have been mutated in favour of the State

exchequer. Resultantly, the petition succeeds. The objections to

the mutation entry is hereby quashed and set-aside. The petition

is accordingly disposed of with clarification that the revenue

authority cannot recover the dues of the Company from the

property of the HUF on the ground that some of the members of

the HUF are Directors of the Company.