TMI Blog2007 (9) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... dings were initiated against the assessee under the Act. Therefore, the assignment deeds executed by the partners of the assessee-firm in favour of the petitioners are void under section 26A. Exhibit P 2 order is valid and the learned single judge has rightly rejected the contentions raised by the petitioners. In the instant case, powers under sections 37 and 38 were not invoked. On the other hand, respondents 5 and 6 were directed to vacate the houses. We hold that exhibits P3 and P4 notices cannot be implemented against the petitioners. However, it is made clear that this will not preclude the respondent concerned from initiating steps under sections 37 and 38 of the Revenue Recovery Act after notice to the petitioners. Therefore, exh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1992-93, penalty of Rs. 41,00,000 for 1992-93, Rs. 2,51,56,900 for 1993-94 and penalty of Rs. 2,87,00,000 for 1993-94. The factory of the fourth respondent was inspected by the sales tax officers on April 20, 1993, June 22, 1993, August 18, 1993 and January 21, 1994. Proceedings for assessment of sales tax were initiated on the basis of the inspection held on January 21, 1994. Notices were issued by the Intelligence Officer to the firm directing them to appear and produce the books of account on January 21, 1994, February 10, 1994, February 17, 1994, March 3, 1994, March 18, 1994 and March 25, 1994. They failed to appear on these dates. The petitioners claim that they are the assignees of properties from resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the petitioners during pendency of any proceedings under the Sales Tax Act including pendency of finalisation of any assessment or penalty he will declare the sale deeds subject to sections 26A and 26B, KGST Act and proceed to sell the properties by virtue of section 21 of the KGST Act as transaction by partners are also hit by the said sections of the KGST Act . The Tahsildar heard the petitioners and passed exhibit P2 order dated September 19, 2006 and rejected the claim made by the petitioners. The Tahsildar held that the sale deeds in favour of the petitioners were executed during the pendency of the assessment proceedings for 1992-93 after the inspection of the factory on January 21, 1994 and therefore the sale deeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Sri. K.P. Muhammadali resides in the house which he transferred to the second petitioner Sri. C. Muhammed. Sri. Hamsakutty, Kapoor House, Thenkara, Mannarkkad resides in the house which was purchased by first petitioner Sri. K.P. Hamsa from the fifth respondent. Hamsakutty is the brother of fifth respondent. The petitioners are not in possession of the above properties. Section 26A of the KGST Act reads thus: Where, during the pendency of any proceedings under this Act or after the completion thereof, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) of any of his assets in favour of any person, such charge or transfer shall be void a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of section 26A of the Act. Once the ingredients of section 26A are attracted, the transfer made by the assessee would be void. The transferee cannot claim any valid title in such cases as against any claim in respect of any tax or any other sum payable by the assessee under the KGST Act. In the present case, the transfers were effected after proceedings were initiated against the assessee under the Act. Therefore, the assignment deeds executed by the partners of the assessee-firm in favour of the petitioners are void under section 26A. Exhibit P 2 order is valid and the learned single judge has rightly rejected the contentions raised by the petitioners. The petitioners challenge exhibits P 3 and P 4 notices as well. As per these not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de of Civil Procedure, 1908. It is true that section 37 of the Act empowers the Collector to assume the management of the property attached. Section 38 can be invoked by the Collector to appoint an agent for the management of the property in respect of which management is assumed under section 37. In the instant case, powers under sections 37 and 38 were not invoked. On the other hand, respondents 5 and 6 were directed to vacate the houses. We hold that exhibits P3 and P4 notices cannot be implemented against the petitioners. However, it is made clear that this will not preclude the respondent concerned from initiating steps under sections 37 and 38 of the Revenue Recovery Act after notice to the petitioners. Therefore, exhibits P3 and P4 n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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