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TMI Blog2015 (12) TMI 1658X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. R. Mahadevan, J. For Petitioner : Mr.V. Ragavachari For Respondent :Mr.S. Kanmani Annamalai, AGP ORDER In this Writ Petition, the Petitioner has challenged the proceedings of the Respondent dated 9.7.2002 and 11.9.2002, demanding the Petitioner to pay the arrears of tax and proceeding on the property in question. 2. The Petitioner, who is the manufacturer of automobile, purchased the property in question from M/s.Auto Spin Machinery P Limited in the year 1997. The Petitioner received a notice dated 10.9.2001, alleging that the vendor of the Petitioner was in arrears of sales tax for the periods 1993-94 and 1994-95 and hence, proposing to proceed on the property to recover the arrears of sale tax and also directing the Petitioner to pay the amount. Another notice dated 1.10.2001 was also issued to the same effect and then, the Petitioner issued a notice dated 24.1.2002, denying the liability. However, the impugned notice dated 9.7.2002, has been issued, directing the Petitioner to settle the arrears, alleging that the Petitioner is holding the property of the defaulter and thereafter, the impugned distraint order dated 11.9.2002 under Section 8 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 1998 (I) CTC 124 , the Division Bench of this Court followed the decision of the Honourable Supreme Court in Ahmedabad Municipal Corporation of the City of Ahmedabad v. Haji Abdul Gafur Haji Hussennbhai reported in AIR 1971 SC 1201 and held that unless a provision is made in any statute contrary to the rule of Section 100 of the Transfer of Property Act, a bona fide purchaser for consideration without notice of the charge is protected. The relevant paragraphs are extracted hereunder: 14. We will now refer to the said judgment of the Supreme Court which is reported in Ahmedabad Municipal Corporation of the City of Ahmedabad v. Haji Abdul Gafur Haji Hussenbhai. In that case before the Supreme Court, the party was in arrears of property tax due under the Bombay Provincial Municipal Corporation Act. The said Act imposed a charge over the property held by a defaulter. The same was brought to sale in execution of a mortgage decree. When the municipality purported to exercise their charge over the property, the purchaser in court auction filed a suit for a declaration that he was the owner of the property and that therefore, the arrears of municipal taxes due by the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales tax arrears. We are compelled to make the above observation because there is a subsequent Division Bench judgment of this Court in Coramandel Indag Products India Ltd. v. commercial Tax Officer, 1993 (3) MTCR 8, dated October 29, 1992. Before the division Bench of this Court, the very same point was agitated and the judgment of the Supreme Court above referred to was also cited. All the same, the Division Bench has again chosen to follow the earlier Division Bench judgment of this Court in Dy. Commercial Tax Officer v. Asha Kumari, 1985 (14) STL (Mad.) 164. The latter Division Bench Judgment was rendered on October 29, 1992 in W.A.No.1019 of 1989 and the facts are almost identical to the facts of the present case. In that case, the assessee-company had tax arrears. They sold a property belonging to them on April 14, 1980, when the statutory charge had been fastened on them. When the Revenue proceeded against the transferee and a Form No.7 notice was issued the transferee filed a writ petition against the recovery proceedings. The transferee contended that they are the bona fide purchasers for value without notice of the charge. When the decision of the Supreme Court in Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with section 24(2) of the Sales Tax Act. In this connection, they purported to follow the Division Bench judgment of this court in Dy. Commercial Tax Officer v. Asha Kumari, 1985 (14) STL 164 (Mad.) : 1985 WLR 240. We have already pointed out that the earlier Division Bench judgment in Asha Kumari's case, 1985 (14) STL 164 (Mad.) had not adverted to section 100 of the Transfer of Property Act or the judgment of the Supreme Court in Ahmedabad Municipal Corporation of the City of Ahmedabad v. Haji Abdul Gafur Haji Hussenbhai. 15. Having regard to the clear and categorical views expressed by the Supreme Court inAhmedabad Municipal Corporation of the City of Ahmedabad v. Haji Abdul Gafur Haji Hussenbhai, , we are not inclined to accept the two Division Bench judgments of this Court in Dy. Commercial Tax Officer's case, 1985 (14) STL 164 (Mad.) and Coramandel Indag Products India Ltd's case 1993 (3) MTCR 8, we would have normally referred the issue for decision by a Full Bench, but for the fact that the judgment of the Supreme Court is crystal clear. To repeat unless a provision is made in any statute contrary to the rule of section 100 of the Transfer of Property Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Transfer of Property Act when once valid demand notices had been issued which were far anterior in point of time to the sale deed in view of the ratio of decision of this Honourable Court in Balakrishna Goenka v. State of Tamil Nadu, 1981 (2) SISTC 43. In other words, out of the four points raised by us, we are not deciding the first two points as well as the fourth point. It is only on the third point we hold, following the Supreme Court judgment in Ahmedabad Municipal Corporation of the City of Ahmedabad v. Haji Abdul Gafur Hani Hussenbhai, that the respondent is a bona fide purchaser without notice of the charge under section 24(2) of the Sales Tax Act and therefore, his property cannot be proceeded against for the recovery of sales tax arrears. In this view of the matter, the appellants cannot proceed against the property of the respondent for the alleged arrears of sales tax due from a fresh vendor, viz., Ramkumar Gogia . We do not decide the question whether under the Revenue Recovery Act only the property of a defaulter can be brought to sale. We also do not want to decide the question whether the technical defects in the notices issued by the appellants would vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made, after six years from the date, on which the assessment has been finalised. The tax officials have not reported the charge over the property, held by the dealer to the Registration Department. Even assuming that there is a charge, by virtue of the statutory provision, the bona fides of the petitioner in purchasing the property, after six years from the date of assessment, cannot be doubted, as it is the case of the petitioner that she had verified the encumbrance. On the contra, the contention of the respondent that the demand notices have been issued to the dealer has not been substantiated. At this juncture, this Court deems it fit to extract a decision of the Apex Court, which has distinguished the pleadings and proof required in a writ proceeding and a civil suit. In Bharat Singh and Others Vs. State of Haryana and Others , reported in 1988 (4) SCC 534 , at paragraph 13, the Supreme Court held as follows: .... In our opinion, when a point which is ostensibly a point of law is required to be substantiated by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evident which must appear from the writ petition and if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brance details from the Registration Department, in the year 2004, when she had purchased the property. When the subsequent sale has been effected after six years from the first sale, it is incumbent on the respondent to prove collusion, with the defaulting dealer. There can be a presumption of collusion with the defaulting dealer, if the transactions are in quick succession. But, if there is a long gap of six years between the first sale and the subsequent sale, without there being any action by the Revenue to realise the arrears of tax from the defaulter or against the immediate subsequent purchaser on the facts of this case, this Court is of the view that even collusion cannot be presumed. In the absence of any rebuttal to the bona fides of the purchase, absentism or negligence, in making due enquiry with the Registration Department, prior to purchase, the conduct of the subsequent purchaser cannot be doubted by making any allegation of fraud, being played on the revenue. 29. Though the respondent has contended that the petitioner ought to have obtained a 'No Objection' from the revenue before purchasing the property, no provisions have been quoted by the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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