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TMI Blog2021 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... in default. While obtaining registration under the provisions of the Commercial Tax Department, the father of the second respondent Mr.K.P. Kesavan, the vendor who sold the property to the petitioner had offered the said property as a security for a sum of ₹ 50,000/- as is evident from a reading of Form XIX-B - Copy of Form XIX-B executed by the second respondent s father along with the second respondent on 23.02.2000 clearly states that the mortgage/charge for the specified schedule property was to secure the interest of the Commercial Tax Department for a sum of ₹ 50,000/- only under Section 21 of the aforesaid Act. The petitioner has not bought a property of the second respondent. Therefore, defence under Section 24-A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that there was no charge registered against the property in the Encumbrance Certificate dated 28.10.2013. 4. It is submitted that only after the Encumbrance Certificate dated 28.10.2013 was received and after satisfying that there are no other encumbrance against the said property, the petitioner purchased the property and registered it on 06.01.2014 for an adequate consideration of ₹ 13,50,000/- 5. The petitioner claims to be a bona fide purchaser of the property. The impugned notice is assailed on the ground that the arrears of tax of the said concern cannot be fastened on the petitioner. It is submitted that the petitioner was unaware of the fact that the property purchased from the second respondent s father was off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the vendor of the property had offered the property as a security to the Commercial Tax Department when the second respondent, the proprietor of M/s.Kairali Steels Traders had obtained registration and had executed Form XIX-B before the first respondent on 23.02.2002. The vendor had furnished a security for a sum of ₹ 50,000/- as was required under Section 21 of the Tamil Nadu General Sales Tax Act, 1959 and had created a mortgage of the property. 8. The learned Government Advocate for the first respondent further submitted the decision of the court rendered in Tvl. K. Senthamil Selvan Vs. The deputy Commercial Tax Officer has been appealed before the Division Bench in W.A.No.982 of 2020 and the case would be taken up for final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 clearly states that the mortgage/charge for the specified schedule property was to secure the interest of the Commercial Tax Department for a sum of ₹ 50,000/- only under Section 21 of the aforesaid Act. 14. The petitioner has not bought a property of the second respondent. Therefore, defence under Section 24-A of the Tamil Nadu General Sales Tax Act, 1959 that the purchase was for adequate consideration and without notice of arrears of tax is available to the petitioner. 15. The two decisions cited by the learned Government Advocate for the respondent which were authorized by me are distinguishable on facts. In I.Jeyrajan Vs. Commercial Tax Offc. case referred to supra, the Court dealt with a situation where there were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The property was not purchased from the second respondent. The property was mortgaged to the Commercial Tax Department for a maximum sum of ₹ 50,000/- only. Therefore, the facts are different. 19. I therefore find no reasons to sustain the impugned order asking the petitioner to pay the arrears of tax of M/s.Kairali Steels Traders. The petitioner cannot be saddled with liability of the arrears of tax of the second respondent s proprietary concern, namel y M/s.Kairali Steels Traders . However, since the property was mortgaged for a sum of ₹ 50,000/-, the petitioner is directed to pay the aforesaid amount to the first respondent herein, within a period of thirty days from the date of receipt of a copy of this order. On such p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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