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2021 (11) TMI 1136 - SCH - VAT and Sales TaxRecovery of statutory dues - priority of charges - argument of the petitioner is that the charge is not in respect of the property as such but is the consequence of the statutory dues - HELD THAT - The fact remains that there is first charge of the State on the property in respect of the statutory dues. Having agreed to the terms referred to above it is not open for the petitioner to resile from the liability to discharge the same in connection with the first charge of the State on the property in question - the writ petition is dismissed.
Issues: Liability for statutory dues in property auction.
Analysis: The Supreme Court heard the arguments of both parties extensively. The petitioner's counsel highlighted certain observations from the High Court's judgment, claiming they were not in favor of the petitioner regarding constructive notice. However, the Supreme Court noted that these observations did not support the petitioner's case. The crux of the matter revolved around the terms of the agreement signed by the petitioner before the auction. The agreement explicitly stated that all statutory dues, charges, taxes, and liabilities related to the sold property must be borne by the purchaser. Additionally, any encumbrances known to the bank but not disclosed were not the bank's responsibility. The bidders were required to conduct thorough investigations before submitting their bids. The Supreme Court emphasized that by agreeing to these terms, the petitioner had accepted the responsibility for paying any statutory dues to clear any charges on the property. The petitioner's argument that the charges were a consequence of statutory dues and not directly related to the property itself was dismissed by the Court. It was affirmed that the State held the first charge on the property for statutory dues. Ultimately, the Supreme Court upheld the High Court's decision to reject the petitioner's writ petition and the reliefs sought. The Court dismissed the special leave petition, affirming the petitioner's liability to discharge the statutory dues associated with the property. The Court also agreed that upon payment of the sales tax dues, a fresh sale certificate should be issued in favor of the petitioner, a request to be considered by the Bank accordingly.
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