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2021 (11) TMI 107 - TELANGANA HIGH COURTRecovery of tax - attachment of immovable property - validity of sale of immovable property - right of bonafide purchaser - adequate consideration - 2nd respondent has stated that the immovable property was attached under warrant of attachment - whether transfer affected by the 3rd and 4th respondents in favour of the petitioners is not for adequate consideration? - HELD THAT:- As provisions of Section 281(1) of the Act would stand attracted, only when a demand is raised and the same is not paid by the assessee, thereby, becoming an assessee in default. It is only when an assessee is declared as assessee in default and certificate of recovery is drawn up, the protection provided under the said Section 281(1) of the Act would be available. In the facts of the case, it is not shown to this Court that the transfer affected by the 3rd and 4th respondents in favour of the petitioners is not for adequate consideration or that attachment of the subject property has been made before the petitioners had purchased the same. Going by the admission of the 2nd respondent in the impugned order itself, it is evident that warrant of attachment in ITCP-16 was issued for the first time on 04.10.2002. On the other hand, the sale deeds under which petitioners 1, 2 and 4 had purchased the property are all registered on 19.07.1999 and that of the 3rd petitioner on 24.07.1999. Further, it is also to be noted that the order of attachment issued mentions that certificate of recovery has been drawn up only on 02.06.2000, whereby it is held that the3rd respondent has failed to pay the sum as shown therein. As the 3rd respondent is treated as an assessee in default only upon the drawing up of certificate of recovery dt. 02.06.2000, the transfers of immovable property effected prior to the said date in favour of the petitioner cannot be said to be hit by the provisions of Section 281(1) of the Act; consequently, the purchase of flats by the petitioners is a bona fide purchase and are covered by the escape route provided under Section 281(1) of the Act, as held in ICICI Bank case [2019 (3) TMI 701 - TELANGANA AND ANDHRA PRADESH HIGH COURT] Thus, the petitioners are entitled to claim the benefit of protection provided under Section 281(1) of the Act in respect of purchase of flats made by them from the 3rd respondent under registered documents bearing Nos.1666/99, 1667/99 and 1668/99 dt.19.07.1999 executed by the 3rd and 4th respondents in favour of petitioners 1, 2 and 4 and registered document No.1736 of 1999 executed on 24.07.1999 in favour of the 3rd petitioner by the 3rd and 4th respondents.
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