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2010 (9) TMI 968 - HC - VAT and Sales TaxNotice of attachment of immovable property in form No. 48, dated October 15, 2008 (annexure F) and the notice, dated October 15, 2008 (annexure H) directing the petitioner to vacate the said property challenged Held that - It is not in dispute that the proceedings regarding the second respondent s liability to pay tax attained the finality in 2002. For six long years respondent No. 1 did nothing to issue the notice of attachment. Suddenly after six long years when the third party interests have come in, the notice of attachment is issued. Yet another aspect which cannot be ignored is that no steps whatsoever are taken to have the charge on the property created in respect of the property. There is no doubt that the charge is created by the operation of law. But, if the third parties are to be guarded against dealing with such properties, it is certainly desirable for the tax authorities to have the charge entered in the sub-registrar s records. Thus quash the impugned notice of attachment, dated October 15, 2008 (annexure F) and the notice, dated October 15, 2008 (annexure H). Respondent No. 1 is directed to consider the petitioner s reply, dated June 20, 2008 (annexure E) in accordance with law and pass appropriate orders thereon. The first respondent s reconsideration has to be meaningful and in the light of the reasons given herein for quashing the impugned notice. Needless to observe that the quashing of the impugned notice would not come in the way of respondent No. 1 proceeding against respondent No. 2 and its properties to recover the tax dues, etc.
Issues:
Challenge to notice of attachment of immovable property and direction to vacate property. Analysis: The petitioner challenged the notice of attachment of immovable property and the direction to vacate the property. The petitioner had purchased the property and was paying property tax regularly. However, the Commercial Tax Department issued notices regarding tax arrears to the previous owner, leading to the attachment notice on the petitioner's property. The petitioner, a bona fide purchaser, had made all due inquiries and even issued a public notice inviting objections to the property purchase. The petitioner argued that no charge was registered against the property by the tax department. The Government Pleader contended that the petitioner should have checked for any charges with the tax department before purchasing. Respondent No. 2, the previous owner, had closed down the business in 1997. The petitioner pointed out the clear title clause in the sale deed, emphasizing no encumbrances on the property. The court found the notice of attachment unsustainable for various reasons. The petitioner's reply to the tax arrears notice was not considered by the tax department, rendering the subsequent attachment notice invalid. There was no explanation for the delay of six years in issuing the attachment notice after the tax liability was finalized. The court noted the necessity for tax authorities to officially record charges on properties to protect third-party interests. Consequently, the court quashed the attachment notice and directed the tax department to reconsider the petitioner's reply in accordance with the law. The decision did not impede the tax department from pursuing tax recovery from the previous owner and their properties. The petition was allowed without any costs.
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