Can property of mother be attached for recovery of due from son?
According to Section 57 of the Gujarat VAT Act, 2003, where a person who is or has been a dealer, liable to pay tax under this Act, dies, then:
- If a business carried on by the dealer is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such dealer under this Act or under any earlier law, and
- if the business carried on by the dealer is discontinued, whether before or after his death, his legal representative shall be liable to pay out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, penalty or interest due from such dealer under this Act or under any earlier law, whether such tax interest or penalty has been assessed before his death but has remained unpaid or is assessed after his death.
Let us refer to the case of Nirupaben Manilal Thakkar Vs State of Gujarat (Gujarat High Court), where the issue under consideration was whether property of mother could be attached for recovery of due from son or not.
The writ applicant had prayed for the following reliefs:
- HC to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions to the respondent authorities to delete the charge created on the property.
- During the pendency and final disposal of the present petition, HC to direct the respondent authorities to restrain from taking any coercive steps pursuant to charge created on the property.
- HC to pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the present case.
Reference to Earlier order passed by HC
- HC did not delve much into the facts of this litigation as the order passed by this very Bench dated 4th March, 2021 was self-explanatory.
- According to the earlier order, the principal argument of the applicant that, the respondents could not have invoked Section 57 of the Gujarat VAT Act, 2003 for the purpose of recovering the dues of the deceased dealer as the immovable property sought to be put to auction was of the ownership of the mother of the deceased dealer and it was not the estate of the deceased
- The second argument was that, even for the purpose of invoking Section 57 of the GVAT Act, 2003, the condition precedent was a notice under Section 42 of the GVAT Act in accordance with the Rule 61 of the Rules.
- In the absence of any notice of demand under Section 42 of the GVAT Act, 2003 read with Rule 61 of the Rules, no notice for auction of the property in question under Section 152 of the Gujarat Land Revenue Code could be issued.
- Prima facie, it appeared that, there was nothing to indicate that the immovable property in question is the estate of the deceased.
- There was nothing to even indicate that the deceased dealer was the joint owner or a co-owner of the property in question.
- However, with a view to give one opportunity to the AGP to meet with the aforesaid two arguments of the writ applicant, HC granted one week time to the AGP.
- On the next date of hearing, AGP would point out to the HC in what manner the property in question was the estate of the deceased and whether any notice of demand under Section 42 of the GVAT Act, 2003 read with Rule 61 of the Rules was issued at any point of time, in accordance with law.
Observations of HC in the current hearing
- When the matter was taken up for further hearing, AGP appearing for the respondents very fairly submitted that the Department was not able to gather any cogent material or any other evidence to even remotely indicate that the deceased was a joint owner, or had any other right, title or interest in the property in question.
- HC took notice of one communication addressed by the VAT Department to the Mamlatdar, Ahmedabad.
- This communication was in context with the cancellation of the mortgage entry as regard the property in question.
- With reference to the subject noted above, it was stated that Mr Kamlesh Manilal Thakkar, a Proprietor of M/s. Manilal Devchand, was the debtor of this office, who died on 31/12/2010.
- As he was not the owner of the said property, its original owner Mrs. Nirupaben Manilal Thakkar had submitted written evidences regarding the charge recorded on the said property.
- Considering the said evidences, no government proceedings were required to be initiated against the said property.
- Therefore, it was ordered that the mutation of Encumbrance Entry in the record of the said property was hereby cancelled and the property stood discharged from free of all encumbrances.
- The aforesaid made the picture abundantly clear that late Kamlesh Manilal Thakkar was the proprietor of the proprietary concern, namely, M/s. Thakkar Manilal Devchand and he passed away on 31st December, 2010.
- The Department had stated that the property in question was not of the ownership of Kamlesh Manilal Thakkar but the lawful owner is Smt. Nirupaben Manilal Thakkar (the writ applicant herein).
In such circumstances, it was informed by the Department to the Mamlatdar that no other steps were required to be taken with respect to the property, and the mutation of the charge over the property to be cancelled. HC observed that if the Department wants to recover the dues of the deceased dealer, then the same could not be recovered from the immovable property in question as the said property was not the estate of the deceased.