First charge in sales tax does not defeat title of auction purchasers without notice when property was sold before attachment.

Sales tax arrears could not be enforced against property already sold in a bank auction where the purchasers were transferees for value without notice. Although the sales tax enactment created a first charge, it did not expressly authorise recovery against property in the hands of such transferees. Because the secured creditor had sold the property before the tax authorities proceeded with attachment, and no material showed notice of the charge to the auction purchasers, the post-sale attachment could not override their title and was unsustainable.

---

---

Issues: Whether sales tax arrears could be enforced against property purchased by the petitioners in a bank auction, and whether the attachment issued by the sales tax authorities was valid against transferees for value without notice.

Analysis: The property had been sold by the secured creditor in exercise of powers under the securitisation law before the tax authorities proceeded by attachment. The statutory first charge under the sales tax enactment was recognised, but it did not by its terms authorise enforcement against property in the hands of a transferee for consideration without notice. The petitioners were purchasers in a public auction and no material showed notice of the tax charge. In these circumstances, the protection against enforcement of a charge against such transferees applied, and the post-sale attachment could not prevail against their title.

Conclusion: The sales tax arrears were not recoverable from the property purchased by the petitioners, and the attachment against that property was unsustainable.

---