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2021 (8) TMI 444 - HC - VAT and Sales TaxPriority of Charge - First Right of secured creditor and Sales Tax Department - Seeking direction to register sale certificate on receipt of stamp duty and registration charges - evasion of tax - attachment of property - encumbrance in the property - HELD THAT:- The respondent no. 5 has purportedly refused to register the sale certificate relying on Clause (i) of Sub-Rule (1) of Rule 44 of the Rules of 1961, though it is not specifically stated in the affidavit-in-reply filed by the respondent no. 5 or during the submissions made on behalf of the respondents. It needs to be noted that Sub-Section (1) of Section 22-A clearly provided that only if a notification is published in the Official Gazette declaring that registration of any document or class of document is opposed to any public policy, only then the question of refusal of registration of the document will arise. Even otherwise, since Section 22-A is no longer on the statute book, registration of the sale certificate could not have been refused on the ground of same being in contravention of Section 22-A of the Act of 1908. The ground of encumbrance to refuse registration of a document is in relation to marketable title of the property. There is encumbrance of the Department of Sales Tax. The Registering Officer shall have to ascertain whether the requisite permission from the Competent Authority under the relevant enactment has been obtained and is required to annex the said permission, if it is prohibited. The Registering Officer will also have to ascertain whether the document presented for registration is contrary to any of the terms and conditions mentioned in the NOC granted by the Competent Authority. Undisputedly, in the present matter, the respondents have not shown any such statutory prohibition which enables the Registering Officer to refuse registration of the sale certificate. Thus, it is the duty of the respondent no. 5 to register the sale certificate issued in favour of the auction purchaser by the Authorized Officer under the provisions of the Rules of 2002. The respondent no. 7 is duty bound to take action against the defaulter for evading taxes and recovering its dues by attaching their movable properties - respondent no. 5 is directed to register the sale certificate dated 06/07/2020 subject to compliance of Ground Nos. 2 and 3 and on payment of stamp duty as per the ready reckoner and after following all the other requirements of law as per the Registration Act, 1908 - the registration of the sale certificate shall not be refused on the basis of encumbrance of the respondent no. 7. Application disposed off.
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