Case Law Details
Shakti Cotton Pvt. Ltd. Vs Commercial Tax Officer (Gujarat High Court)
Proceedings under Section 44 of the GVAT Act are in the nature of garnishee proceedings, i.e. attachment of a debt by means of which judgment-creditor is enabled to reach the money due from the judgment-debtor, which is in the hands of a third person. Issuance of a notice in writing to the person from whom the money is due and may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay the same to the Assessing Officer is a sine qua non for initiating the proceedings under Section 44 of the GVAT Act. In the absence of the notice to the concerned person, there is no valid initiation of the garnishee proceedings.
Under sub-section (5) of Section 44 of the GVAT Act, a person to whom a notice under this sub-section is sent has a right to object to the notice by a statement that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee and then nothing contained in this sub-section would require such person to pay any money or part thereof, as the case may be.
After the person concerned objects by filing a statement that the sum demanded or any part thereof is not due from him to the assessee, then recovery cannot be effected from him unless the Assessing Officer or the Tax Recovery Officer holds an inquiry in which the concerned person is associated. In the inquiry, such person or dealer shall have to be given an opportunity of being heard.
In the case on hand, no notice was sent to the writ-applicants nos.2 and 3 respectively in the manner prescribed and straightway the respondent no.1 proceeded to attach the personal properties of the two writ-applicants.
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