TMI Blog2004 (10) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... dhra Pradesh General Sales Tax Act, 1957 (for short, "the Act") on February 6, 2004. According to the attachment order and the notice under section 17-A of the Act, one M/s. Mehar Tanneries Private Limited was assessee on the rolls of the Commercial Tax Officer, Suryaraopet, Vijayawada, for the years 1993-94 to 1996-97 and fell in sales tax arrears to the tune of Rs. 35,98,030. Several notices were issued for payment of the arrears and when arrears were not paid, the Sub-Registrar, Gannavaram, was also addressed a letter on September 16, 2003 by registered post with acknowledgment due requesting him not to register the immovable properties of the above company. Meanwhile, M/s. Mehar Tanneries Private Limited, Vijayawada, sold its immovable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different provisions of the Act. Section 16-C of the Act lays down that: "16-C. Liability under this Act to be the first charge. Notwithstanding anything to the contrary contained in any law for the time being in force [any amount of tax, Government loan extended to the dealer due to treating deferred tax as deemed to have been paid, penalty, interest] and any other sum if any, payable by a dealer or any other person under this Act, shall be the first charge on the property of dealer, or such person]." Section 17-A of the Act reads as under: "17-A. Transfers to defraud revenue void. Where during the pendency of any proceeding under this Act, or after the completion thereof any dealer creates, a charge on, or parts with the possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to prove and in fact not even the acknowledgment due was placed on record. In any case, even if such letter has gone to the Sub-Registrar and the Sub-Registrar failed to take notice of that letter, a bona fide purchaser cannot be punished for that. While analysing section 17-A of the Act, we feel that after discharging the initial burden that the property was sold to defraud the department and avoid payment of sales tax, the onus will shift to the purchasers to show that they were bona fide purchasers and that they were not parties to the fraud being played by the assessee, and they had paid adequate consideration for the purchase. 7.. In the present case, the initial burden has not been discharged by the department. In the counter-aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question is whether the plaintiff is a bona fide purchaser for value so as to be protected by the second paragraph of section 53(1) reading: 'Nothing in the section impairs the rights of the transferee in good faith and for consideration.' As stated earlier, the learned trial Judge held that Rs. 19,000, the sale price was the full value of the property and that the consideration as recited in the document was paid by the purchaser. This finding has not been set aside by the High Court. We are, therefore, proceeding on the basis that the transfer was real and supported by consideration. The narrow question is whether the plaintiff was a transferee in good faith. It was submitted on behalf of the appellant that the learned Judges of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) This general inference apart, the plaintiff admittedly had with him a copy of the deed of dissolution dated March 31, 1949 which disclosed that the firm's business had resulted in losses and that it was greatly indebted, the debts amounting to Rs. 2 lakhs. (3) If as we have held that registration of the sale deed at Madras was with a view to keep the transaction secret from the creditors, the plaintiff was as much a party to the secrecy as the transferor. (4) One matter which would be of considerable relevance and significance in this connection would be the enquiries that the plaintiff made before he took the transfer. He no doubt led evidence to show that he consulted his lawyers about the title of the vendor, but any attempt at ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
