SHANTABEN Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The original plaintiff Bai Shantaben who is the appellant in this appeal is the wife of one Dahyabhai Patel partner of the firm of M/s. Narsibhai Rambhai Patel. The firm of M/s. Narsibhai Rambhai Patel was a dealer and was duly registered under the provisions of the Bombay Sales Tax Act 1959 (hereinafter referred to as the Bombay Act). The assessment proceedings were started against the said firm by issuing a notice on 25/09/1964 and during the pendency of those proceedings. Dahyabhai Patel executed a sale-deed on 24-11-1966 in favour of his wife Shantaben and sold away the suit properties to her. The order of assessment was passed on 31-1-1967 and Rs. 26 149 were found due from the said firm and an order was passed on 5-4-1972 to recover the dues by sale of the suit properties. The plaintiff Shantaben filed the present suit being Regular Civil Suit No. 725 of 1973 in the Court of the Civil Judge Senior Division. Surat for a declaration that the suit properties were of her exclusive ownership and they were not liable to attachment or sale for Sales-tax dues of the firm of M/s. Narsibhai Rambhai Patel and for an injunction restraining the State and its officers from recovering the amount from the said properties. The defendants resisted the suit. The defendants raised several contentions. one of the contentions being that the transaction in favour of the plaintiff by her husband was a dishonest and colourable one entered into with intent to defraud the Government and. therefore the suit properties were liable to attachment and sale for the dues of sales-tax of the firm of M/s. Narsibhai Rambhai. The learned trial Judge held in favour of the plaintiff and passed a decree in favour of the plaintiff accordingly. The State of Gujarat-defendant No. 2 filed Regular Civil Appeal No. 167 of 1977. The learned Extra Assistant Judge who heard the appeal reached the conclusion that the transfer in favour of the plaintiff by her husband was hit by section 73 of the Gujarat Sales Tax Act 1969 and therefore the properties which were sold by Dahyabhai to the plaintiff during the pendency of the proceedings were liable to attachment and sale for recovery of sales-tax dues. The learned Assistant Judge accordingly allowed the appeal and set aside the judgment and decree passed by the trial court and dismissed the suit of the plaintiff. He also directed the respondent to pay the costs of the appellant of both the Courts and bear her own. Being dissatisfied with the same Bai Shantaben. the original plaintiff filed the second appeal against the State of Gujarat.

(2.) When the appeal came up for hearing before me arguments were advanced by the learned Advocates Shri S. N. Shelat for the appellant and the learned Assistant Government Pleader Mr. S. T. Mehta all throughout referring to the provisions of Gujarat Sales Tax Act 1969 Looking to the provisions of sec. 3(11) sec. 18 sec. 73 and section 43 of the Gujarat Sales Tax Act 1969 I took the view that the transfer effected by Dahyabhai in favour of his wife was hit by sec. 73 of the Gujarat Act and accordingly I dictated the judgment on 21/12/1984 dismissing the appeal. When I was going through the said judgment it struck to me that probably the Gujarat Sales Tax Act 1969 may not apply to the present case because assessment proceedings were started by issuing a notice on 25/09/1964 while the transfer was effected by Dahyabhai in favour of his wife in the year 1966 and even the assessment proceedings were over in the year 1967 while the Gujarat Sales Tax Act 1969 was brought on statute book with effect from 13-3-1970. It struck to me that the Bombay Sales Tax Act 1959 was in force during that period and therefore the provisions of the said Act would be applicable. Hence I went through the said Bombay Act and found that though there were similar provisions in the Act of 1959 there was difference in the language. Looking to the provisions in the Act of 1959 and the corresponding relevant provision of the Gujarat Act 1969 T was inclined to take the view that the transaction in question will not be hit by any of the provisions of 1959 and the appeal may have to be allowed. I brought this aspect to the notice of the learned Assistant Government Pleader Mr. S. T. Mehta and he also felt that possibly the transaction in question will not be hit by any of the provisions of the Bombay Act of 1959 which was in force at that time. Hence I did not sign that judgment and fixed the matter for re-hearing. I have therefore heard the learned Advocate Mr. S. N. Shelat as well as the learned Assistant Government Pleader Mr. S. T. Mehta in the light of the provisions of the Bombay Sales Tax Act 1959.

(3.) The provisions of the Gujarat Sales Tax Act 1969 are not applicable in the present case as stated by me earlier. But it will be proper to re-produce the relevant sections of the said Act also so as to arrive at a proper interpretation of the provisions of the Act of 1959 which have a bearing on this question. Sec. 2(10) of the Gujarat Sales Tax Act. 1969 defines dealer which reads as follows:-