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TMI Blog2016 (7) TMI 1634X X X X Extracts X X X X X X X X Extracts X X X X ..... er Enterprises vs. State of M.P. Ors. reported as [ 2008 (8) TMI 1006 - MADHYA PRADESH HIGH COURT] , where it was held that the Commercial Tax Department has absolutely no justification or jurisdiction to order the attachment and sealing of the property of the petitioner, which had been purchased by it from M. P.F.C. Both the writ appeals were dismissed on the ground that the property purchased by the respondent No.1 Company from the Corporation cannot be put to auction by the Commercial Tax Department of the State Government for recovery of the arrears of commercial tax from the erstwhile owners - Appeal dismissed. - Writ Appeal No. 351/2011 And Writ Appeal No. 411/2009 - - - Dated:- 25-7-2016 - Hon'ble Shri P.K. Jaiswal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtisement published by MPFC had purchased the said unit which earlier belongs to M/s Sourabhha Spinners Pvt. Ltd. 5. The respondent no.1 was the highest tenderer for the aforesaid properties, and as such, offer made by the Company was accepted by the MPFC and a sale-deed was executed between the respondent No.1/company and respondent No.2 M.P. Financial Corporation with regard to the sale of properties. 6. There were certain dues of Commercial Tax Department and, therefore, they initiated proceedings for recovery of the same from the respondent no.1/auction purchaser . The claim of the respondent No.1 that since the aforesaid properties had vested in it, free from all encumbrances, and it had purchased the said properties from the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said letter, the respondent No.2 issued the proclamation of sale for reauctioning of the property purchased by the respondent No.1. The respondent No.1 is a bonafide purchaser and as per the provisions of Section 49 of the M.P. Commercial Tax Act, 1994, the transferrery shall be liable to pay the tax due from the transferrer only when the entire business is transferred. In the present case the respondent No.1 has not purchased the entire business of the previous owner and only lease hold right of plot and factory building has been purchased. The respondent No.1 MPFC while exercising the statutory powers conferred under Section 29 of the State Financial Corporation Act, 1951, auctioning the property and converted into money in the shape of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The sale of the property in favour of the respondent- No.1 Firm is nevertheless a sale by the respondent No.2 M.P. Financial Corporation to the respondent No.1 Firm under Section 29 of the Act and therefore under Section 29 (2) of the 1951 Act, the title acquired by the purchaser is to be treated to be free from all encumbrances. Any liability of original borrower company could not, by any stretch of imagination, be fastened upon the respondent-Firm. The stand taken by the Commercial Tax Department is absolutely contrary to the provisions section 29(2) of the 1951 Act. 15. In Isha Marbles vs. Bihar State Electricity Board and Another (1995) 2 SCC 648, a three-Judge Bench of the Apex Court had an occasion to consider a similar questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctricity is public property. Law, in its majesty, benignly protects public property and behoves everyone to respect public property. Hence, the courts must be zealous in this regard. But, the law, as it stands, is inadequate to enforce the liability of the previous contracting party against the auction-purchaser who is a third party and is in no way connected with the previous owner/occupier. It may not be correct to state, if we hold as we have done above, it would permit dishonest consumers transferring their units from one hand to another, from time to time, infinitum without the payment of the dues to the extent of lakhs and lakhs of rupees and each one of them can easily say that he is not liable for the liability of the predecessor-in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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