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2006 (9) TMI 495 - HC - VAT and Sales TaxSales tax created u/s 24 - Tamil Nadu General Sales Tax Act, 1959 - charge for payment of arrears - binding on the bona fide purchaser for value or not - whether the appellant is a bona fide purchaser without notice of the charge u/s 24(1) - HELD THAT:- In this case there is absolutely no evidence on the side of the plaintiffs to discharge the initial burden. That being so the contention of the learned counsel for the appellant that the plaintiffs have discharged their initial burden cannot be accepted. But on the other hand P.W. 1 in his cross examination has categorically admitted that he did not enquire T. P. Narayanasamy about the sales tax arrears. Therefore, the omission on the part of the plaintiffs to enquire with their vendors regarding their sales tax arrears amounts to negligence on their part and also it will amount to willful abstention. In this case the plaintiffs had the means of obtaining the necessary information and the plaintiffs with prudent caution might have obtained knowledge of the charge and therefore the failure on their part to make necessary enquiries with their vendors will amount to willful abstention or gross negligence and therefore it could be held that the plaintiffs have constructive notice. We have to point out that the fact that the plaintiffs marked exhibit A-46 through D.W. 7 will itself show that they had knowledge about the sales tax arrears of their vendors. It is not the case of the plaintiffs anywhere that exhibit A-46 was obtained by them from their vendors or from some other source after filing of the suit. Therefore, we have to hold that the plaintiffs are not bona fide purchasers without notice. The learned single Judge after considering at length the contents of exhibits A-46, B-15, B-24, B-25, B-26, B-27 and B-36 has rightly observed that the conclusion of the Trial Court that S.V. Traders was proprietory concern cannot be sustained and the Trial Court failed to consider the material portions and the documents placed by the defendants in the form of documents. The learned single Judge has also rightly observed that a perusal of the pleadings of both the parties as well as the evidence clearly shows that the plaintiffs were very well aware of the sales tax arrears from 1973-74 and knowing fully well they have purchased the property from T.P. Narayanasamy. The learned Judge on a perusal of the entire oral and documentary evidence has further held that T.P. Narayanasamy and his son T.N. Subash in order to escape from the tax liability after knowing that there was a default committed by them and a charge has been created as per section 24 of the Act, with the fraudulent intention sold the only property in favour of the plaintiffs. Therefore, we see no reason to interfere with the findings recorded by the learned single Judge and we concur with the findings. In the result, the letters patent appeal fails and the same is dismissed. However, there will be no order as to costs. Consequently, the connected CMP is closed.
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