Bona fide purchaser protection limits enforcement of tax arrears charges against transferred property without statutory override.

A tax arrears charge cannot be enforced against property transferred for consideration to a bona fide purchaser without notice unless the statute expressly overrides that protection. Applying the principle recognised by the Supreme Court, the Madras High Court noted that the Tamil Nadu sales tax recovery scheme contained no express provision displacing section 100 of the Transfer of Property Act. As the transferee had purchased the property for value without notice of the charge or arrears, the property could not be proceeded against for recovery of the sales tax dues, and the recovery attempt failed.

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Issues: Whether a transferee of property is protected from recovery of sales tax arrears when the transfer is for consideration and without notice of the statutory charge, so that the property cannot be proceeded against for sale recovery.

Analysis: The firm's tax arrears had created a charge on the defaulter's property under the sales tax provisions, but the property had been transferred before the recovery measures were pursued against the transferee. The governing principle applied was that a charge cannot be enforced against property in the hands of a transferee for consideration without notice unless the statute expressly provides otherwise. The Court followed the rule stated by the Supreme Court and held that the Tamil Nadu sales tax recovery scheme did not contain any express provision overriding the protection available under section 100 of the Transfer of Property Act. The Court also accepted the transferee's stand that there was no notice of the charge or arrears.

Conclusion: The transferee was a bona fide purchaser for value without notice, and the property could not be proceeded against for recovery of the sales tax arrears. The writ appeal failed.

Ratio Decidendi: In the absence of an express statutory provision to the contrary, a charge for tax arrears cannot be enforced against property transferred for consideration to a bona fide purchaser without notice of the charge.

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