THE COMMISSIONER, TRADE TAX, U.P. versus M/S RADICO KHETAN LTD

Citation: [2022] 12 S.C.R. 797 · Decided: 19-09-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Dismissed

Judgment (excerpt)

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   [2022] 12 S.C.R. 797
797
THE COMMISSIONER, TRADE TAX, U.P.
v.
M/S RADICO KHETAN LTD.
(Civil Appeal Nos. 6396-6397 of 2009)
SEPTEMBER 19, 2022
[M. R. SHAH AND KRISHNA MURARI, JJ.]
U.P. Trade Tax Act, 1948 – s.34 – When applicable – Held:
s.34 shall be applicable only in a case where there is a transfer of
immovable property belonging to the original assesee, during the
pendency of any proceedings under the Act with the intention of
defrauding any such tax or other dues – As per proviso to s.34,
nothing in s.34 shall impair the rights of a transferee in good faith
and for consideration – In the present case, the transfer of goods,
plant, and machinery (may be treated as immovable property) in
favour of the respondent-purchaser took place on 12.12.85 and
01.01.86 for consideration, whereas the assessment proceedings
(for the assessment years 1980-81,w.r.t which the amount of tax
due andpayable by the original assesseeis in dispute) had concluded
in the year 1984 and assessment was reopened in the year 1988 –
Also, the recovery certificate was issued against the original assessee
on 15.04.90 and the endorsement for recovery against the purchaser
was on 26.03.93 – Thus, at the time of transfer of immoveable
property of the assessee which was for value/consideration, no
proceedings under the Act were pending, therefore s.34 shall not
be applicable – Hence, the endorsement to recover the amount due
and payable by the original assessee against the purchaser which
was in exercise of powers u/s.34 was rightly set aside by the Trade
Tax Tribunal – No error committed by High Court in dismissing the
revision applications confirming the orders passed by the Tribunal.
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.6396-
6397 of 2009.
From the Judgment and Order dated 16.12.2008 of the High Court
of Judicature at Allahabad in Trade Tax Revision Nos.664 and 667 of
1999.
R. K. Raizada, Sr. Adv., Bhakti Vardhan Singh, Vikas Bansal,
Advs. for the Appellant.
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SUPREME COURT REPORTS
[2022] 12 S.C.R.
Dhruv Agarwal, Shwetank Sailakwal, Nishit Agarwal, Shubham
Sharma, Ms. Kanishka Mittal, Vipin Kumar Jai, Advs. for the Respondent.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgments
and orders dated 16.12.2008 passed by the High Court of Judicature at
Allahabad in Trade Tax Revision Nos. 664/1999 and 667/1999, by which,
the High Courthas dismissed the said revision applications preferred by
the Revenue and has confirmed the orders passed by the Trade Tax
Tribunal (hereinafter referred to as the Tribunal) allowing Appeal Nos.
259/97 (80-81) and 260/97 (81-82) holding that recovery certificate issued
in the name of M/s. Shaw Scott Distillery (P) Ltd. (hereinafter referred
to as the original assessee) and endorsed against M/s. Radico Khaitan
Ltd. (hereinafter referred to as the purchaser) could not be proceeded
against the purchaser, the Revenue has preferred the present appeals.
2. The facts leading to the present appeals in a nutshell are as
under: -
2.1 That the original assessee – M/s. Shaw Scott Distillery (P)
Ltd., Rampur was in arrear of Rs. 11,28,877/- and Rs. 53,89,035/- of
trade tax for the year 1980-81 and 1981-82, respectively. The recovery
proceedings were initiated against the original assessee. The recovery
certificate was issued. The plant, machinery and the goods belonging to
the original assessee came to be purchased by respondent herein –
purchaser on 12.12.1985 and 01.01.1986 for a total consideration of Rs.
12,12,000/-. The Assessing Officer (AO) found that the transfer of
aforesaid property was effected by the original assessee at the time
when the assessment proceedings were pending and the Assessing
Officer found that the said transactions in favour of the purchaser were
for the purpose to defraud the Revenue. Therefore, in exercise of powers
under Section 34 of the U.P. Trade Tax Act (hereinafter referred to as
the Act), the recovery certificate issued in the name of original assessee
was endorsed by the Assessing Officer treating the aforesaid transfers
void to be recovered the amount from the purchaser in same way as it
had to be recovered from the original assessee.
2.2 The purchaser – respondent herein - M/s. Rampur Distillery
& Chemicals Ltd. (subsequently renamed as M/s. Radico Khaitan Ltd.)
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challenged the endorsement of recovery certificate against it before the
First Appellate Auth

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