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2020 (4) TMI 337 - HC - VAT and Sales TaxRecovery of tax dues from the buyer of property as land revenue - bonafide purchasers or not - Presumption of knowledge of statutory charge created, either under Section 24 of the Tamil Nadu General Sales Tax Act, 1959 or under Section 42 of the Tamil Nadu Value Added Tax Act, 2006 - enforceability of charge - Section 100 of the Transfer of Property Act, 1882 - HELD THAT:- A charge created by operation of law will not automatically infer a presumption of knowledge on the intending purchasers about the tax arrears, as well as the consequent charge on the property, which they intend to purchase. Consequently, the question of “Wilful Abstention” or “Gross Negligence”, would generally be a question of fact or law or a mixed question of fact and law and the exception to such a finding would be the three explanations given under Section 3 of the Transfer of Property Act, 1882 as well as to cases wherein the purchaser has failed to make enquiries on the arrears of municipal taxes with the authorities. If and when this proposition is applied to the issue involved in the present case, the objections raised by the respondents that the intending purchasers had constructive notice of the charge on the property would be contrary to this decided ratio. While that being so, when the prospective purchasers are not expected to have constructive knowledge of the charge and when the property is purchased for a valid consideration and without notice of the charge, they would be entitled to the saving clause provided under Section 100 of the TP Act. While holding that the purchasers cannot be imputed with constructive knowledge of the existence of municipal taxes or tax arrears and on the facts of the case, the Hon’ble Apex Court held in AHMEDABAD MUNICIPAL CORPORATION OF THE CITY OF AHMEDABAD VERSUS HAJI ABDULGAFUR HAJI HUSSENBHAI [1971 (3) TMI 89 - SUPREME COURT] that an enquiry with the vendors was sufficient to hold that the purchasers had not indulged in willful abstention or gross negligence. Petition allowed.
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