LAWS(MAD)-2012-3-497

S SUBRAMANIAN; MAHALAKSHMI TEXTILE MILLS LTD Vs. COMMISSIONER, COMMERCIAL TAXES AND REGISTRATION DEPARTMENT

Decided On March 28, 2012
S Subramanian; Mahalakshmi Textile Mills Ltd Appellant
V/S
Commissioner, Commercial Taxes And Registration Department Respondents

JUDGEMENT

(1.) This writ appeal is filed against the order passed by the learned single Judge in W.P.(MD)No.2603 of 2008 filed by one S.Subramanian, representing himself as the custodian of M/s.Mahalakshmi Textile Mills Limited, Dharapuram. The said Writ Petition was filed seeking a writ of certiorari to quash the auction notice dated 18.01.2005 issued by the Deputy Commercial Tax Officer, Kodaikanal for arrears of sales tax of M/s.Mahalakshmi Textile Mills Ltd. The said Writ Petition was considered along with the batch of Writ Petitions filed by various other parties against the statutory authorities and financial institutions, wherein the company figured in as a respondent.

(2.) While considering the various Writ Petitions, learned single Judge passed a common order dismissing some of the Writ Petitions and disposing of some Writ Petitions with certain directions. As far as W.P.(MD)No.2603 of 2008 leading to the filing of the present Writ Appeal is concerned, S.Subramanian, the first appellant herein, claimed that he represented the interests of the company which went into deep financial crisis and that under a Memorandum of Understanding entered into with the Managing Director of the company dated 13.10.2004, for the purposes of selling the company as a going concern, the said Subramanian undertook to discharge all the loans and liabilities of the company. In respect of the demand made by the Commercial Taxes Department leading to a recovery proceeding, the said Subramanian filed Writ Petition (MD) No.2603 of 2008. Learned single Judge pointed out that as on the date of passing of the Writ order, there may be statutory claims by ESI Corporation, Employees Provident Fund Organisation, Commercial Tax Department, Punjab National Bank and ICICI Bank, apart from the dues to the workmen. The properties of the mill were attached by various creditors. In the background of this, learned single Judge held that the alleged right of the said Subramanian, the first appellant herein, to deal with the properties of the company on the basis of Memorandum of Understanding between him and the Managing Director dated 13.10.2004, was held as doubtful, having no legal sanction. Learned single Judge pointed out that it was not even a registered document even for looking into it. Thus questioning the authority of the Managing Director to enter into a Memorandum of Understanding without involving the entire company, learned single Judge pointed out that the said Subramanian had no right to sell the properties of the company, which were already subjected to various attachment orders. Further, the said Subramanian had not obeyed the orders of the Division Bench of this Court dated 01.03.2006 and 24.5.2006 in Writ Appeal No.28 of 2006. This Court further pointed out that considering the conduct of the first appellant herein "it was clear that he was not a genuine investor but a corporate buster". In the circumstances, this Court felt that the said Subramanian, first appellant herein could not be allowed to touch the properties of the company. "Even persons, who claim to be bona fide purchasers of the properties cannot question the sale brought about by the Commercial Tax Department." In the circumstances, the Writ Petition filed by the first appellant herein was dismissed.

(3.) It may be of relevance to point out that in Paragraph-22 of the impugned order, learned single Judge pointed out that since there are many claimants for the properties of the company including statutory claims, the Secretary to the Government, Commercial Tax & Religious Endowment Department, Government of Tamil Nadu, Fort St.George, Chennai was directed to convene a meeting of the representatives of ESI Corporation, Employees Provident Fund Organisation, Commissioner for Commercial Tax, Punjab National Bank and ICICI Bank as well as the Commissioner of Labour to arrive at a consensus regarding selling the properties of the company, and once the properties are sold, the amount realised should be apportioned to satisfy various claims with due proportion to each of the claimants. This Court directed the Secretary to the Government, Commercial Tax & Religious Endowment Department, Government of Tamil Nadu, to carry out the said exercise within a period of twelve weeks from the date of receipt of a copy of the order. Aggrieved over the order thus passed by the learned single Judge, the present writ appeal is filed at the instance of the said S.Subramanian.