1982 (5) TMI 171 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of auction sale of properties due to sales tax assessment.
2. Effect of annulment of assessment order on auction sale proceedings.
3. Rights of auction purchaser in case of annulled assessment order.

Analysis:
1. The petitioner was assessed to sales tax on an estimated turnover for the year 1969-70. An appeal against the assessment was dismissed, leading to recovery proceedings initiated by the Sales Tax Officer. Subsequently, one-third share in a house and five shops were attached and auctioned off to a respondent for a certain sum.

2. The petitioner's revision against the assessment order was allowed, annulling the assessment and remanding the case for a fresh assessment. However, during this period, a sale certificate was issued to the auction purchaser and a sale deed was executed in their favor. The petitioner sought to quash the sale proceedings, arguing that the annulment of the assessment order should render the auction sale invalid. The court disagreed, stating that the annulment of the assessment order did not impact the validity of the auction sale or the purchaser's title acquired through the sale deed.

3. The court referenced a Supreme Court decision to support its stance, emphasizing that the auction purchaser's title to the properties remains valid even if the initial demand created by the assessment order is later annulled. The respondent, having acquired an undivided one-third share through the auction sale, was entitled to symbolic possession over the properties until the share is demarcated. Ultimately, the court dismissed the petitioner's plea, ruling that the respondent's title to the properties stands despite the annulment of the assessment order, and the petitioner is not entitled to any relief in this matter. The parties were directed to bear their own costs.