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TMI Blog2013 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner company. As long as the transaction, between the original assessee and the petitioner company, is not shown to be fraudulent in nature it cannot be said that such transaction is void, as per Section 24-A of the Tamilnadu General Sales Tax Act, 1959. - Decided against the revenue. - W.P.No.22679 of 2004 - - - Dated:- 22-3-2012 - MR. M. JAICHANDREN J. For petitioner: Mr. R. Yashod Vardhan, Senior Advocate for Mr. R. Sunil Kumar For respondents: Mr. S. Kanmani Annamalai Government Advocate ORDER Heard the learned counsel for the petitioner and the learned counsel appearing on behalf of the respondents. 2. It is stated that the petitioner company is one of the highly reputed companies in the business of Information Technology and Software Consulting. The petitioner has executed several turnkey projects for some of the top companies in India and in some foreign countries. As such, the petitioner had procured large tracts of land for setting up a world-class software centre, at Sholinganallur, Chennai. 3. It has been further stated that M/s.Gum (India) Limited, a Public Limited Company had one of its manufacturing facilities at Sholinganal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax department and an order under Section 269 UL (1) of the Income Tax Act, 1961, was also given, on 24.1.2001, stating that there was no objection to the transfer of the property in favour of the petitioner. 8. The petitioner had exercised due diligence and had made the necessary enquiries relating to the land. Only thereafter the petitioner had purchased the property in question, with the bona fide belief that the land was free of all encumbrances, and that there were no proceedings pending against the vendor. Further, as the vendor had stated, at the time of the execution of the sale deed, on 30.3.2001, that a sum of ₹ 8,00,000/- was payable to the Employees Provident Fund, the said sum had been paid to the Employees Provident Fund Organization. 9. It has been further stated that the petitioner company has been in possession and enjoyment of the property in question, without any hindrance or claim by third parties. While so, the first respondent had issued a demand notice, dated 5.5.2003, asking the petitioner company to pay a sum of ₹ 43,36,216/-, as the alleged arrears of sales tax due, from M/s.Gum (India) Limited, the original assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be void as against any claim, in respect of any tax or any other sum payable by the dealer. However, the proviso to the said section states that such charge or transfer shall not be void if it is made for adequate consideration and without notice of the pendency of such proceedings under the Act, or without notice of such tax or other sum payable by the dealer. In the present case the petitioner company had no knowledge of the proceedings initiated against the vendor of the property, under the provisions of the Tamilnadu General Sales Tax Act, 1959. 14. It had also been pointed out that Section 100 of the Transfer of Property Act, 1882, also makes it clear that no charge shall be enforced against any property in the hands of the person to whom such property had been transferred for consideration and without notice of the charge. 15. The learned counsel for the petitioner had also submitted that necessary enquiries had been made by the petitioner company, regarding the pendency of acquisition proceedings. The Special Tahsildar, Land Acquisition, had given a certificate that no such proceedings were pending at the time of the purchase of the land in question. It had al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich cannot be gone into by this Court, in a writ petition filed under Article 226 of the Constitution of India. 19. It has been further stated that such contentious questions of facts can only be agitated before a Civil forum. As per Section 24(1) of the Tamilnadu General Sales Tax Act, 1959, the tax payable under the provisions of the Act should be paid in accordance with the notice of demand. In default of such payment the whole of the amount outstanding on the date of the default shall become due and shall be a charge on the properties of the person liable to pay the tax in question. Accordingly, the assessee, under the Tamilnadu General Sales Tax Act, 1959, the vendor of the property in question, had committed default in paying the sales tax arrears, to the first respondent, to the tune of of ₹ 43,36,216/-. As the assessee had not paid the said amount to the first respondent, as arrears of sales tax, a charge had been created in the land in question, purchased by the petitioner. Therefore the claim of the petitioner company that it is not liable to pay the arrears of sales tax, payable by the vendor of the property in question, cannot be accepted. 20. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not bona fide in nature. 25. The respondents have not been in a position to show that the petitioner company had knowledge of the arrears of sales tax, liable to be paid by the original assessee, who is the vendor of the property in question. In such circumstances, the proviso to Section 24-A of the Tamilnadu General Sales Tax Act, 1959, would come to the rescue of the petitioner company. 26. As long as the transaction, between the original assessee and the petitioner company, is not shown to be fraudulent in nature it cannot be said that such transaction is void, as per Section 24-A of the Tamilnadu General Sales Tax Act, 1959. As the respondents have failed to establish their claim that the petitioner company had purchased the property in question, with the knowledge of liability of the Employees Provident Fund, and in respect of the payment of the sales tax arrears, said to be payable to the respondents, the purchase of the said property, by the petitioner company, cannot be held to be invalid in the eye of law. As such, the contentions raised on behalf of the respondents cannot be countenanced. In such view of the matter, this Court finds it appropriate to set aside t ..... 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