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2021 (3) TMI 278 - HC - VAT and Sales TaxRecovery of arrears of tax due from M/s.Kairali Steels Traders for the period between 2009-10 to 2012- 13 - TNGST Act - It is submitted that the petitioner was unaware of the fact that the property purchased from the second respondent’s father was offered as a security to the Commercial Tax Officer when second respondent obtained registration for M/s. Kairali Steels Traders under the provisions of the Tamil Nadu General Sales Tax Act, 1959 and thus, the arrears of tax of the said concern cannot be fastened on the petitioner. HELD THAT:- The second respondent, the proprietor of M/s.Kairali Steels Traders was an assessee 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 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. This writ petition is partly allowed by quashing the impugned order by directing the petitioner to pay a sum of ₹ 50,000/- to the first respondent being the value of the security offered by the petitioner’s vendor/ second respondent’s father in Form XIX-B. No cost.
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