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Issues: Whether the writ petition challenging distraint and proposed auction of the petitioner's property for sales tax arrears was maintainable in view of the statutory priority created under the Tamil Nadu General Sales Tax Act, 1959 and the disputed question whether the property had been furnished as security.
Analysis: The petitioner disputed liability and denied creation of any valid security or mortgage over the property. The respondent relied on the dealer's arrears, the security bond said to have been executed, and the statutory scheme under Section 24(2) of the Tamil Nadu General Sales Tax Act, 1959, which gives priority to tax dues over claims against the dealer's property and permits recovery as land revenue. The Court held that the controversy whether the petitioner had in fact created a valid equitable mortgage and whether the property could be proceeded against on the basis of the security bond raised disputed questions of fact that could not be satisfactorily resolved in writ jurisdiction. The existence of the statutory first charge and the availability of a civil forum for adjudication of the factual disputes weighed against entertaining the writ petition.
Conclusion: The writ petition was not maintainable and the challenge to the distraint proceedings failed.
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