C/SCA/3661/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 3661 of 2020 GAURAVBHAI HARGOVINDBHAI DAVE Versus TAX RECOVERY OFFICER-4 Appearance: MR.S.N.SHELAT, SENIOR ADVOCATE WITH MR.VISHWAS SHAH, ADVOCATE (11047) for Petitioner(s) No. 1,2 MS MOHINI K SHAH(775) for Petitioner(s) No. 1,2 for Respondent(s) No. 2 MRS MAUNA M BHATT(174) for Respondent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 10/02/2020 ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. By this writ application under Article 226 of Constitution of India, writ applicants have prayed for following relief(s): 9(a) Be pleased to quash and set aside impugned show cause notice dated 10.11.2017 and impugned order dated 27.12.2017 passed under Section 179 of Income Tax Act, 1961 for AY 2010 11 by respondent no.2 against petitioners (Annexure P1 and P2) (b) Be pleased to quash and set aside auction sale conducted on 24.01.2020 by respondent no.1 under second schedule of Income Tax Act, 1961. (c) Pending hearing, admission and final disposal of this petition, be pleased to grant Page 1 of 6 Downloaded on : Tue Apr 21 10:45:08 IST 2020 C/SCA/3661/2020 ORDER status quo qua properties depicted in impugned auction Sale Notice dated 23.12.2019. (d) Cost of this petition. (e) Any other relief, order or direction which Hon'ble Court may deem just, fit, proper and equitable in facts of case. 2. This is second round of litigation. We take notice of fact that writ applicants had come before this Court by filing Special Civil Application No.284 of 2019 and Special Civil Application No.285 of 2019 respectively. In Special Civil Application No.285 of 2019, following reliefs were prayed for: (A) YOUR LORDSHIPS may be pleased to issue appropriate writ, order or direction, quashing and setting aside impugned orders of attachment dated 01.03.2012 and 19.12.2018, order setting proclamation dated 29.10.2018 and 19.12.2018 and proclamation of sale dated 21.12.2018 as being bad, illegal, unjust, unreasonable, arbitrary, violative of principles of natural justice and contrary to law. (B) YOUR LORDSHIPS may be pleased to stay implementation, operation and execution of Proclamation of Sale dated 21.12.2018 (Annexure E) issued by Respondent pending admission, hearing and final disposal of this Petition. (C) YOUR LORDSHIPS may be pleased to grant such other and further reliefs as may be deemed fit by this Hon'ble Court, in interest of justice. 3. Both writ applications referred to above came to be rejected by Co Ordinate Bench of this Page 2 of 6 Downloaded on : Tue Apr 21 10:45:08 IST 2020 C/SCA/3661/2020 ORDER Court vide judgment and order dated 05.08.2019. While rejecting two writ applications, Coordinate Bench observed in Paragraph No.9 as under: 9. Thus, writ applicant is aggrieved by action of revenue department putting attached properties for sale by issue of proclamation for purpose of recovery of tax amount due and payable by Company, in which, writ applicant is one of Directors. As noted above, order under Section 179 of Act also came to be passed by Assessing Officer. order passed under Section 179 of Act attained finality. same was not challenged by writ applicant at any point of time. 4. Co Ordinate bench took notice of fact that order under Section 179 of Income Tax Act 1961 (for short Act 1961) had been passed by Assessing Officer and same had attained finality. This Court also took notice of fact that same was not challenged by writ applicants at any point of time. We also take notice of fact that proclamation of sale was challenged by writ applicants by filing Special Civil Application No.19670 of 2018 and Special Civil Application No.19672 of 2018 respectively. Coordinate Bench of this Court disposed of both writ applications vide order dated 22.01.2016. operative part of said order reads thus: In light of order passed in Special Civil Application Nos.284 of 2019 and 285 of 2019, grievance voiced in present petitions does not survive. petitions stand disposed of accordingly. Notice is discharged with no orders as Page 3 of 6 Downloaded on : Tue Apr 21 10:45:08 IST 2020 C/SCA/3661/2020 ORDER to costs. 5. position, as on date, is that auction proceedings have attained finality. Department has accepted entire amount from auction purchaser towards sale proceeds. 6. In our opinion, it is too late in day for writ applicants to now challenge order dated 27.12.2017 passed by Deputy Commissioner of Income Tax under section 179 of Act 1961. 7. Mr.S.N.Shelat, learned Senior Counsel appearing with Mr.Vishwas Shah for writ applicants invited our attention to chart of Approx Book Debts List produced at Page No.81 of paper book. We find reference of names of few debtors from whom Company has to recover amount. According to writ applicants, amount of almost Rs.7 crore, has to be recovered by Company. 8. In other words, argument is that instead of recovering aforesaid amount in tune with provisions of Section 179 of Act 1961, Department proceeded to put immovable properties to auction. It is too late in day for writ applicants to redress any grievance of any nature having not challenged order passed under Section 179 of Act 1961 and having permitted order to attain finality. At this point of time, it would not Page 4 of 6 Downloaded on : Tue Apr 21 10:45:08 IST 2020 C/SCA/3661/2020 ORDER be appropriate for this Court to disturb entire auction proceedings undertaken by Department. 9. company has defaulted in payment of income tax to tune of Rs.1907.90 Lakh. In such circumstances, even if say of writ applicants is accepted that company has to recover amount of Rs.694.60 Lakh, company would not be in position to make payment of outstanding tax liability. Therefore, when order dated 27.12.2017 passed under Section 179 of Act 1961 has attained finality and is implemented with auction of immovable properties, no interference is called for at this belated stage. grievance of writ applicants with regard to so called irregularities and illegalities in auction proceedings conducted by respondents can be agitated before appropriate forum. Merely because company is now running concern by virtue of orders passed by NCLT, Mumbai in Insolvency Petition filed by ARCIL, it would not alter situation with regard to recovery of dues of income tax under provisions of Act 1961. order passed by NCLT has been quashed by Supreme Court. 10. In result, this writ application fails and is hereby rejected. 11. At this stage, our attention is drawn to Page No.66 of paper book Annexure P/7 to Page 5 of 6 Downloaded on : Tue Apr 21 10:45:08 IST 2020 C/SCA/3661/2020 ORDER writ application. It is application filed by writ applicants under Section 154 of Act 1961 addressed to Deputy Commissioner of Income, Circle 4(1)(1), Ahmedabad. We may also say that if such application is preferred, Deputy Commissioner may look into same expeditiously in accordance with law. Direct service is permitted. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) GIRISH Page 6 of 6 Downloaded on : Tue Apr 21 10:45:08 IST 2020 Gauravbhai Hargovindbhai Dave v. Tax Recovery Officer-4