2006 (11) TMI 546 - HC - VAT and Sales Tax

Summary

Issues:
Challenge of statutory charge over property due to sales tax arrears by subsequent purchasers.

Analysis:
The writ petition challenged the order of the first respondent creating a statutory charge over a property sold by an assessee to her son-in-law, and subsequently to the petitioners. The petitioners claimed to be bona fide purchasers without notice of the charge, citing a Division Bench decision where encumbrance couldn't be created over property sold in a court auction. The Full Bench had previously interpreted section 24 of the Tamil Nadu General Sales Tax Act, equating the charge to a simple mortgage and emphasizing the need for purchasers to prove lack of notice. The Court highlighted the importance of material facts in pleading, as failure to state essential details could lead to dismissal of the suit.

The Court emphasized the necessity for the petitioners to provide substantial evidence proving their status as bona fide purchasers without notice of the charge. The judgment referred to the Transfer of Property Act to determine the criteria for identifying such purchasers. The petitioners were advised to present material evidence in a civil court to establish their claim within a specified timeframe. The decision was based on the need for thorough evidence to support the petitioners' assertion of being unaware of the charge over the property.

In conclusion, the writ petition was dismissed, granting the petitioners the opportunity to pursue their case in a civil court within a specified period. The judgment underscored the requirement for the petitioners to furnish concrete evidence supporting their claim of being bona fide purchasers without knowledge of the statutory charge. The decision highlighted the importance of adhering to legal procedures and providing substantial proof in cases involving challenges to property charges due to tax arrears.