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TMI Blog2018 (3) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ok up both W.A.(MD)No.866 of 2015 as well as W.P(MD)No.7482 of 2015 for final disposal. 2.The facts of the case as stated in the supporting affidavit are as follows; 2.1.The appellant / writ petitioner purchased 1 acre and 42 cents in Survey No.49/1, 49/2, 49/3 and 49/4 of Kunnakudi village from one Mr.Dinesh N.Patel, through a registered sale deed dated 05.07.2004, for a sale consideration of Rs. 1,25,000/- and he is a bona fide purchaser for value. According to him, he verified the encumbrance certificate with regard to the property he purchased in the office of the Sub-registrar, Tenkasi II Sub Registration District, Tenkasi and satisfied himself that there was no encumbrance and that ever since the date of purchase, he has been in continuous possession and enjoyment over the said property. 2.2.However, on 25.09.2009, he was served with a notice dated 25.09.2009 by the Commercial Tax Officer, Sengottai Assessment Circle, Sengottai, Tirunelveli District, the first respondent herein, directing him to pay a sum of Rs. 8,53,373/- being arrears of tax payable by his vendor Mr.Dinesh N.Patel, in respect of the property in Survey No.49 measuring 1 acre 42 cents. The appellant / writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of any tax, or any other sum payable by the dealer as a result of the completion of the said proceeding or otherwise, but a sale or transfer shall not be void, if it is made for adequate consideration and without notice of the pendency of such proceeding under the Act or, as the case may be, without notice of such tax or other sum payable by the dealer. 5.The learned Counsel appearing for the appellant / writ petitioner would also contend that the property which is sought to be attached, is for the arrears of tax payable for the assessment years 1999 ' 2000, 2000 ' 2001 and 2001 ' 2002, by the said Mr.Dinesh N.Patel, who was running a business dealing in wood at Sengottai. The contentions of the appellant / writ petitioner are; i)The property had been purchased in the year 2004 by him from Mr.Dinesh N.Patel and he was unaware of the pendency of any proceedings by the first respondent under the Act. ii)He is a bona fide purchaser of the aforesaid property and therefore, a charge over his property cannot be created by the first respondent. iii)The respondent has committed an error in passing a distraint order, under Section 8 of the Revenue Recovery Act, when a bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the property of the assessee and any sale of the property by the assessee would be subject to payment of sales tax amount. He would further contend that although, the term 'first charge' is not seen under Section 24 of the Act, it is evidently clear that a statutory charge has been created as per records and the final order of assessment had been made by the competent authority and under such circumstances, the appellant / writ petitioner is not entitled to get any relief in the present writ petition. At this juncture, it is relevant to extract Section 24 and 24 (A) of the Act, which reads as follows; "24.Payment and recovery of tax: (1) Save as otherwise provided for in sub-section (2) of Section 13, the tax assessed or has become payable under this Act from a dealer or person and any other amount due from him under this Act shall be paid in such manner and in such instalments, if any, and within such time as may be specified in the notice of assessment, not being less than twenty-one days from the date of service of the notice. The tax under sub-section (2) of Section 13 shall be paid without any notice of demand. In default of such payments the whole of the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod, he shall also pay, in addition to the amount of tax due as per his return, interest at two per cent of the tax payable for every month or part thereof. (4)Where the tax paid under this Act is found to be in excess on final assessment or revision of assessment, or as a result of an order passed in appeal, revision or review, the excess amount shall be refunded to the dealer after adjustment of arrears of tax, if any, due from him. Where the excess amount is not refunded to the dealer within a period of ninety days from the date of the order of assessment or revision or review, within a period of ninety days from the date of receipt of the order, the Government shall pay by way of interest, where the amount refundable is not less than one hundred rupees, a sum equal to a sum calculated at the rate of one per cent or part thereof of such amount for each month or part thereof after the expiry of the said period of ninety days. ..... 24-A. Transfers to defraud revenue void: Where during the pendency of any proceedings under this Act or after the completion thereof, any dealer creates, a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nows that fact or when, but for willful abstention from an enquiry or search which he ought to have made or gross negligence, he would have known it. This presumption is known as constructive notice. 11.The correctness of a notice of recovery issued to a specific purchaser came up for consideration before the Division Bench of this Court in D.Senthilkumar's case, in which it has been held that the appellant therein was a bona fide purchaser for valuable consideration and therefore, he would be covered within the exempted category, as provided under Section 24 (A) of the Act. It is further held in the said judgment that under Section 100 of the Transfer of Property Act, 1882, a charge may not be enforced against a transferee, if he had notice there of, unless by law, the requirement of such notice had been waived. 12.The learned Counsel appearing for the petitioner also relied on the decision in P.Kannamba and others Vs. The Board of Revenue (C.T.)., Madras reported in (1967) 19 STC 456. In that case, a house property was sold by an assessee on 18th April, 1958. Even on the date of sale, there were arrears of sales tax due by the assessee and in seeking to recover the tax arre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efforts to find out whether there was an encumbrance over the property. A perusal of the encumbrance certificate dated 06.04.2015, reveals that nothing has been mentioned about the charge created over the property. The learned counsel appearing for the first respondent has not averred any mala fides on the part of the appellant / writ petitioner. The first respondent did not also file any materials before this Court to show that steps have been taken by them under the Provisions of the Revenue Recovery Act, against the defaulter from whom the appellant / writ petitioner had purchased the property in the year 2004. 15.In the instant case, it cannot be said that there was willful abstention or gross negligence in making any enquiry that would tantamount to a notice under Section 3 of the Transfer of Property Act, and the appellant / writ petitioner is a bona fide purchaser for value. Therefore, this Court holds that the proceedings in Na.Ka.A3/2350/02 dated 02.03.2015 and in Na.Ka.A3/2350/2002 dated 20.04.2015 and the order of the learned Single Judge passed in M.P.(MD)No.1 of 2014 in W.P.(MD)No.7482 of 2015 dated 30.04.2015 are liable to be set aside. 16.In the result, both the w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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