Statutory charge on auctioned property sustained interest demand against purchaser where tax and interest remained unpaid.

Statutory charge under the Tamil Nadu General Sales Tax Act attached to the dealer's property once tax became payable, so the auction purchaser took the property subject to that encumbrance. Payment and acceptance of the tax component did not extinguish the separate statutory liability for interest on delayed payment under section 24(3). The plea based on cessation of charge under section 24A failed because the tax and interest due under the Act had not been fully discharged. The demand for interest was therefore valid and enforceable against the auction purchaser.

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Issues: Whether an auction purchaser of property sold by TIIC was liable to pay interest on belated sales tax arrears attached to the property, and whether the plea based on cessation of charge under the Tamil Nadu General Sales Tax Act, 1959 could defeat the demand.

Analysis: The liability was held to arise from the statutory scheme under section 24(2), under which an automatic charge attaches to the dealer's property when tax becomes payable. Since sales tax arrears existed, the property sold to the petitioner remained burdened by the statutory charge. The tax component was paid and accepted, but that did not extinguish the further statutory liability for interest on delayed payment under section 24(3). The argument founded on section 24A was rejected because the tax and interest due under the Act had not been fully discharged, and the petitioner's status as an auction purchaser did not, by itself, defeat the statutory demand.

Conclusion: The demand for interest was valid and enforceable against the petitioner, and the writ petitions were liable to be dismissed.

Ratio Decidendi: Where tax arrears attract a statutory charge on property, acceptance of the tax amount does not extinguish the accompanying liability for statutory interest, and a transferee of the encumbered property remains liable until the tax and interest due under the Act are fully discharged.

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