Government land under permissive use could not be auctioned for a mill's tax arrears; auction cancellation stood.

Government land under a registered agreement showing only permissive use by a spinning mill could not be treated as the mill's asset for recovery of commercial tax arrears, so the Commercial Tax Department had no basis to auction it. The auction cancellation was upheld as legally valid, and the bidder's request for confirmation of sale failed. As the bid amount had not been refunded, return of the bid money with interest at prevailing bank rates was directed.

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Issues: Whether the Commercial Tax Department could auction land owned by the Government of Tamil Nadu, but only permissively used by the spinning mill, for recovery of the mill's tax arrears, and whether the petitioner was entitled to confirmation of the auction.

Analysis: The land was held under a registered agreement that showed the mill was only a permissive user and that the property was not assigned or sold to it. On that basis, the land remained Government property and could not be proceeded against as the asset of the mill for recovery of commercial tax arrears. The cancellation of the auction therefore did not suffer from any legal infirmity that could sustain the petitioner's claim for confirmation of the sale. Since the bid amount had not been refunded, the amount paid by the petitioner was directed to be returned with interest at prevailing bank rates.

Conclusion: The challenge to the cancellation of the auction failed, and the writ petitions were dismissed, but the petitioner was granted refund of the bid amount with interest.

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