9911796707
TMI Blog2006 (8) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition are that, the fourth respondent fell in arrears of tax due under, the Andhra Pradesh General Sales Tax Act, 1957 (for short, "the APGST Act"). For recovery of the said arrears of Rs. 28,58,830 the property of the fourth respondent (guest house situated at Pitapuram, East Godavari District) was brought to sale under the provisions of the Revenue Recovery Act, 1864. On more than one occasion, the sale was intercepted by the fourth respondent invoking the jurisdiction of this court under article 226 of the Constitution of India. It may not be necessary to go into the details of various orders passed by this court earlier, but suffice to say that this court stayed the auction on more than one occasion on condition that the fourth respondent makes certain payments towards the arrears of the tax, but the fourth respondent never complied with those conditional orders. Therefore, the second respondent once again issued an auction notification, dated December 19, 2005 calling upon the interested persons to make an appropriate application. The relevant portion of the auction notification reads as follows:-- "OFFICE OF THE COMMERCIAL TAXES DEPARTMENT: TUNI EAST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner, thereafter, requested the respondents 1 and 2 to confirm the auction in his favour and convey the property. However, the respondents did not convey the property to the petitioner. In the meanwhile, the petitioner came to know that the third respondent issued proceedings cancelling the above mentioned auction. The petitioner asserted on oath in the writ petition at para 6 that such a decision was taken by the third respondent without any prior notice to him and he came to know about such a decision through a daily newspaper ("Eenadu" Telugu newspaper), dated January 23, 2006. Hence, the writ petition. The second and third respondents filed their counter-affidavits. The second respondent admitted all the material allegations made by the petitioner. He further stated in the counter-affidavit that, on receipt of the entire amount of sale consideration from the petitioner, he informed the same to the third respondent on January 6, 2006 and requested the third respondent to confirm the auction as per section 38(3) of the Revenue Recovery Act, 1864. It is further stated by the second respondent in his counter-affidavit as follows:-- "It is submitted that the Depu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference is made to the telephonic instructions of Commissioner, Commercial Taxes, Hyderabad, dated December 29, 2005. The proceedings of the third respondent, dated January 6, 2006, reads as follows: -- "PROCEEDINGS OF THE DEPUTY COMMISSIONER (CT): KAKINADA PRESENT: SRI AHMAD NADEEM, I.A.S. Ref: G3. 1146/94, Dated: 6-1-2006 Sub: The Kirlampudi Sugar Mills Ltd.s, Pithapuram -- Auction of their guest house is cancelled -- The dealer's request is accepted and Installments granted -- Orders -- Regarding. Ref: (1) Representation filed by the dealer requesting for grant of installments addressed to the Commissioner (CT) Hyderabad, Dated 28-12-2005. (2) Telephonic instructions of the Commissioner (CT), Hyderabad dated 29-12-2005. (3) Telephonic instructions of the DC (CT) Kakinada, dated December 29, 2005 and DC (CT) Ref. No. G5/ 1146/94, dated December 30, 2005. (4) CTO, Tuni Ref. B6/1323/2000, dated December 30, 2005. ORDER Sri C. Raghuram, Managing Director of M/s. Kirlampudi Sugar Mills Limited, Pithapuram is assessee on the rolls of the Commercial Tax Officer, Tuni and fell in arrears of interest of Rs. 28,58,830 under the APGST Act, 1957, for the year 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent in this regard reads as follows: -- "It is submitted here that the auction was not conducted in a proper manner and the whole auction took place contrary to the instructions of higher authorities. Even workers of the fourth respondent who are opposing the auction were removed by taking the help of police. In view of the above irregularities I have ordered the cancellation of auction/sale proceedings recorded in favour of the petitioner who participated in the auction/sale held on behalf of Government of Andhra Pradesh under the powers vested in me under section 38 of the Revenue Recovery Act and accordingly I have communicated the same to the first respondent to take necessary further action under the Revenue Recovery Act." Therefore, the third respondent issued the proceedings referred to earlier cancelling the auction. Three questions arise for consideration of this court in this case, (1) the authority of the third respondent to cancel the auction already conducted? (2) Whether such power was exercised in accordance with the known procedure established by law? (3) Assuming for the sake of argument that the Commissioner of Commercial Taxes has the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector to set aside the sale on the ground of some material irregularity, or, mistake or fraud, in publishing or conducting it; but, except as otherwise as hereinafter provided no sale shall be set aside on the ground of any such irregularity or mistake unless the applicant proves to the satisfaction of the Collector that he has sustained substantial injury by reasons thereof. (2) If the application be allowed, the Collector shall set aside the sale and may direct a fresh one. (3) Order confirming or setting aside sale:--On the expiration of thirty days from the date of the sale, [if no application to have the sale set aside is made under section 37A or under clause (1) of this section] or if such application has been made and rejected, the Collector shall make an order confirming the sale provided that, if he shall have reason to think that the sale sought to be set aside notwithstanding that no such application has been made or on ground other than those alleged in any application which has been made and rejected, he may, after recording his reason in writing set aside the sale. (4) Refund of deposit or purchase money when sale set aside:-- Whenever the sale of any lands is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich case the decision is referable to sub-section (3) of section 38 of the Act, which obligates the third respondent to record the reasons for such a decision. The order, dated January 6, 2006, insofar as it is material for the present purpose reads as follows: "PROCEEDINGS OF THE DEPUTY COMMISSIONER (CT): KAKINADA PRESENT: SRI AHMAD NADEEM, I.A.S Ref. G3/1146/94 Dated: 06012006 Sub: R.R. Act 1864 -- Attachment of property of M/s Kirlampudi Sugar Mills Ltd., Pithapuram situated in D. No. 11145, Pithapuram -- Auction held on 29 12-2005 -- Auction is cancelled -- Orders -- Issued -- Reg. Ref: Telephonic instructions of DC (CT), Kakinada dated 29-12-2005 (2) Representation filed by the dealer requesting for grant of installments addressed to CCT, Hyderabad, dated 29-12-2005. (3) This office Ref. G5/1146/94, dated 30-12-2005. (4) CTO, Tuni ref. B6/1323/2000, dated 30-122005. ORDER With reference to the Commercial Tax Officer, Tuni's reference fourth cited and in pursuance to the proceeding recorded during the course of auction sale held on December 29, 2005 and sale under section 38 of the R.R. Act, I hereby order the cancellation of the auction/sale proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 4, 2006 the entire amount of sale consideration was paid by the petitioner, the details of which are admitted in the counter-affidavit of the second respondent. In such a case, the cancellation of the auction is not permissible. Dealing with the question, whether the sale conducted in execution of the decree of a civil court could be declined to be confirmed on the ground that the decree is reversed, in appeal the Supreme Court held in Janak Raj v. Gurdial Singh AIR 1967 SC 608 that the confirmation cannot be declined. At para 24 it was held as follows: "For the reasons already given and the decisions noticed, it must be held that the appellant-auction purchaser was entitled to a confirmation of the sale notwithstanding the fact that after the holding of he sale the decree had been set aside. The policy of the Legislature seems to be that unless a stranger auction purchaser is protected against the vicissitudes of the fortunes of the suit, sales in execution would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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