Hon'ble Piyush Agrawal,J.
1. Heard Shri Kaushalendra Nath Singh for the petitioner, Shri Ashish Agrawal for respondent nos. 2 & 3, learned Standing Counsel for respondent no. 1 and Shri Ashok Singh, learned counsel for respondent no. 4.
2. This writ petition has been filed for the following, amongst other, reliefs:-
"I. Issue a writ of mandamus directing the Respondents to execute the Transfer Deed/Transfer Memorandum of Industrial Plot No. 13A/17 U.P.S.I.D.C, Loni Road, Site - II, Mohan Nagar, Sahibabad, Ghaziabad, U.P., in favour of the petitioner.
II. Issue a writ of mandamus directing the respondents to refund the amount paid by the petitioner to the Assistant Commissioner, C.G.S.T. Division - IV, Ghaziabad."
3. Learned counsel for the petitioner submits that pursuant to an advertisement, Central Bank of India invited bids for auction of Industrial Plot No. 13A/17 U.P.S.I.D.C, Loni Road, Site - II, Mohan Nagar, Sahibabad, Ghaziabad. The petitioner a successful bidder deposited the earnest and the remaining amount within the specified time. Pursuant thereto, the Bank issued sale certificate and the deed clearly stated that the said industrial plot is free from all encumbrances. On 07.09.2018, the Bank handed over the original lease deed in favour of the erstwhile owner, letter of the UPSIDC and the keys of the auctioned plot in favour of the petitioner. Thereafter, the petitioner applied for transfer of the plot in question on 11.10.2018 with all the requisite documents before respondent no. 3, but in spite of completion of all the formalities, respondent nos. 2 & 3, without any rhyme or reason, are not transferring the plot in question in favour of the petitioner. Meanwhile, the respondent - UPSIDC wrote a letter to the Assistant Commissioner, Central GST, Ghaziabad on 14.10.2019 to inquire as to whether any government dues/outstanding are pending from the erstwhile owner of the plot in question, i.e., M/s Sarthak Aqua Private Limited.
4. Learned counsel for the petitioner submits that to buy peace and to get the matter of transfer expedited, it has deposited a sum of Rs. 33,59,276/-, under protest, though the same was not liable to be paid by it, yet the transfer deed is not being executed. Hence, the action of respondent no. 2 in not transferring the plot in question in favour of the petitioner since October, 2018 is arbitrary and unsustainable.
5. Shri Ashok Singh, learned counsel for CGST has brought on record the instructions dated 06.01.2021, which are taken on record. On the strength of the instructions, Shri Singh submits that some outstanding dues are pending against the erstwhile owner, i.e., M/s Sarthak Aqua Private Limited, which are liable to be recovered from the plot in question and therefore, the letter was sent requesting respondent no. 3 not to transfer the plot in question in favour of the petitioner.
6. Shri Ashish Agrawal, learned counsel for respondent - UPSIDC submits that the Corporation has not transferred the plot in question only on the request of respondent no. 4; otherwise, petitioner has completed all the formalities.
7. The Court has perused the materials available on record.
8. It is admitted case of the parties that the petitioner has purchased the plot in question from the Bank in auction proceedings and the petitioner deposited the earnest and the remaining amount within the specified time after being declared as a successful bidder. It is also admitted between the parties that the Bank had issued sale certificate and sale deed has also been executed clearly stating therein that the said industrial plot is free from all encumbrances. On perusal of the instructions of respondent no. 4, it also reveals that the plot in question was never tendered/attached/seized with regard to any outstanding dues as claimed by respondent no. 4.
9. The Hon'ble Supreme Court in the case of Rana Girders Limited Vs. Union of India & Others (reported in (2013) 10 SCC 746) has decided a similar issue holding that the dues of central excise are not a charge on the plant & machinery or land & building. The dues of central excise become payable on the manufacturing of excisable items by the erstwhile owner and therefore, these statutory dues are in respect of those products and not the plant & machinery which were used for manufacturing and the same cannot be recovered from the auction purchaser. The relevant paragraphs of the said judgement are quoted below:-
"6. The appellant turned out to be the successful bidder whose bid in the sum of Rs.43 Lakh for land and building being highest was accepted by the UPFC. Sale Deed dated 8th March 2002 was executed. In this Sale Deed it was specifically mentioned that the property is free from all encumbrances by stating that "the vendor herein confirms that the property purchased through the sale deed in favour of vendee is free from all charges and encumbrances......." The appellant had paid a sum of Rs.21.50 Lakh at the time of registration of the Sale Deed and balance amount of Rs.21.50 lakh was to be paid by the appellant to the UPFC which was payable together with interest at the rate of 16% P.A. in instalments as specified in the Schedule to the said Sale Deed. There is no dispute that this balance consideration has been paid by the appellant to the UPFC. Another condition in the Sale Deed, which was also mentioned in the public notice was that:
"All the statutory liabilities arising out of said properties shall be borne by the vendee and vendor shall not be held responsible."
7. The appellant also purchased plant and machinery in the said auction for a total consideration of Rs.1 Crore 93 Lakh for which Agreement dated 15th March 2002 was executed by the parties. This Agreement also contained both the clauses, similar to the clauses in the Sale Deed, namely, the said plant and machinery was free from all encumbrances and that all the statutory liabilities arising out of the plant and machinery of the industrial unit were to be borne by the purchaser i.e. the appellant.
10. Since the appellant had purchased the land and building as well as plant and machinery of the borrower in the auction conducted by the UPFC, the respondent No.2 issued notice dated 25.8.2004 to the appellant stating that the amount in question had now become the liability of the appellant and demanded the aforesaid payment. It was mentioned in the notice that this amount was payable by the appellant in view of the law laid down by this Court in the case of M/s. Macson Marbles Pvt. Ltd. Vs. Union of India2003 (158) ELT 424 SC.
14. Before us, it was strenuously argued by the learned counsel for the Revenue that since the excise duty is a statutory liability such a duty has to be paid by the person who purchased the property of borrower in default even when sold in auction under section 29 of the State Financial Corporation Act. He further argued that in any case the High Court was right in holding that by virtue of the stipulations in the Sale Deed as well as in the Agreement of Sale, so far as the appellant is concerned, it was liable to discharge the excise liability. In the circumstances, two questions arise for consideration namely (1) on the interpretation of stipulation contained in the Sale Deed of the land and building and Agreement of Sale of plant and machinery, whether the appellant had agreed to discharge the dues payable to the excise department by the borrower. (2) Whether such a liability arises in law (de-hors the stipulation in Sale Deed /Agreement of Sale) having regard to the legal provisions contained in the Excise Act and State Financial Corporation Act?
20. Coming to the liability of the successor in interest, the Court clarified the legal position enunciated in M/s. Macson by observing that such a liability can be fastened on that person who had purchased the entire unit as an ongoing concern and not a person who had purchased land and building or the machinery of the erstwhile concern. This distinction is brought out and explained in paragraph 24 and 25 and it would be useful for us to reproduce herein below:
"Reliance has also been placed by Ms.Rao on Macson Marbles Pvt.Ltd. (supra) wherein the dues under Central Excise Act was held to be recoverable from an auction purchaser, stating:
We are not impressed with the argument that the State Act is a special enactment and the same would prevail over the Central Excise Act. Each of them is a special enactment and unless in the operation of the same any conflict arises this aspect need not be examined. In this case, no such conflict arises between the corporation and the Excise Department. Hence it is unnecessary to examine this aspect of the matter.
The Department having initiated the proceedings under Section 11A of this Act adjudicated liability of respondent No.4 and held that respondent No.4 is also liable to pay penalty in a sum of Rs.3 lakhs while the Excise dues liable would be in the order of a lakh or so. It is difficult to conceive that the appellant had any opportunity to participate in the adjudication proceedings and contend against the levy of the penalty. Therefore, in the facts and circumstances of this case, we think it appropriate to direct that the said amount, if already paid, shall be refunded within a period of three months. In other respects, the order made by the High Court shall remain undisputed. The appeal is disposed of accordingly." The decision, therefore, was rendered in the facts of that case. The issue with which we are directly concerned did not arise for consideration therein. The Court also did not notice the binding precedent of Dena Bank as also other decisions referred to hereinbefore."
21. A harmonious reading of the judgments in Macson and SICOM would tend us to conclude that it is only in those cases where the buyer had purchased the entire unit i.e. the entire business itself, that he would be responsible to discharge the liability of Central Excise as well. Otherwise, the subsequent purchaser cannot be fastened with the liability relating to the dues of the Government unless there is a specific provision in the Statute, claiming "first charge for the purchaser". As far as Central Excise Act is concerned, there was no such specific provision as noticed in SICOM as well. Proviso to Section 11 is now added by way of amendment in the Act only w.e.f. 10.9.2004. Therefore, we are eschewing our discussion regarding this proviso as that is not applicable in so far as present case is concerned. Accordingly, we thus, hold that in so far as legal position is concerned, UPFC being a secured creditor had priority over the excise dues. We further hold that since the appellant had not purchased the entire unit as a business, as per the statutory framework he was not liable for discharging the dues of the Excise Department.
22. With this, we now revert to the first issue, namely interpretation of the clause in the Sale Deed for land and building and similar clause in Agreement of Sale for machinery on the basis of which appellant is held to be liable to pay the dues. These clauses have already been incorporated in the earlier portion of our judgment.
23. We may notice that in the first instance it was mentioned not only in the public notice but there is a specific clause inserted in the Sale Deed/Agreement as well, to the effect that the properties in question are being sold free from all encumbrances. At the same time, there is also a stipulation that "all these statutory liabilities arising out of the land shall be borne by purchaser in the sale deed" and "all these statutory liabilities arising out of the said properties shall be borne by the vendee and vendor shall not be held responsible in the Agreement of Sale." As per the High Court, these statutory liabilities would include excise dues. We find that the High Court has missed the true intent and purport of this clause. The expressions in the Sale Deed as well as in the Agreement for purchase of plant and machinery talks of statutory liabilities "arising out of the land" or statutory liabilities "arising out of the said properties" (i.e. the machinery). Thus, it is only that statutory liability which arises out of the land and building or out of plant and machinery which is to be discharged by the purchaser. Excise dues are not the statutory liabilities which arise out of the land and building or the plant and machinery. Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property etc. Likewise, statutory liability arising out of the plant and machinery could be the sales tax etc. payable on the said machinery. As far as dues of the Central Excise are concerned, they were not related to the said plant and machinery or the land and building and thus did not arise out of those properties. Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner, therefore, these statutory dues are in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture. This fine distinction is not taken note at all by the High Court."
10. In view of the judgement of the Hon'ble Supreme Court in the case of Rana Girders Limited (supra), the present issue is concluded in favour of the petitioner.
11. The respondent - UPSIDC is directed to execute the transfer deed/transfer memo of the industrial plot in question in favour of the petitioner within a month from the date of production of a copy of this order.
12. Further, with regard to refund of the amount deposited by the petitioner under protest, the learned counsel for the petitioner submits that the amount was deposited under protest in order to get the matter expedited and there was no liability of the petitioner to pay the same. Learned counsel for the petitioner further submits that under Article 265 of the Constitution of India, any amount cannot be charged/withheld without any authority of law.
13. Shri Ashok Singh, learned counsel for respondent no. 4 could not justify retaining the amount deposited by the petitioner under protest to the tune of Rs. 33,59,276/-.
14. The Hon'ble Supreme Court, on various occasions, has held that no amount can be withheld without any authority of law. In Firm Gulam Husain Hazi Yakub & Sons Vs. State of Rajasthan [1963 (2) SCR 255], it was held that a charge cannot be imposed without legislative sanction. In Cooperative Sugars (Chittur) Ltd. Vs. State of Tamilnadu [1993 (Supp.) 4 SCC 42 (vide para 8)] and District Mining Officer Vs. T.I.S.C.O. [(2001) 7 SCC 358, (vide para 19)], it was held that a tax can only be levied by statutory provision. In Ahmedabad Urban Development Authority Vs. Sharadkumar Jayantikumar [JT 1992 (3) SC 417], it was held that whenever there is compulsory exaction of money, whether as a tax or a fee, there should be a specific statutory provision for the same.
15. In view of the above, respondent no. 4 is directed to refund the aforesaid amount deposited by the petitioner under protest within a month from the date of production of a copy of this order, failing which the authority concerned shall be liable to pay interest @ 8% per annum till the date of actual payment.
16. In the result, the writ petition succeeds and is allowed.
17. No order as to costs.
Order Date :- 20.1.2021 Amit Mishra