Bona fide purchaser protection prevents sales tax attachment where transfer preceded the tax encumbrance and sale certificate stood intact.

A sales tax attachment could not be enforced against property already transferred for value to a bona fide purchaser without notice, where the department created the encumbrance only after the transfer and the earlier sale certificate remained unaltered. The court applied the protection under Section 24(2) of the TNGST Act and held that, absent cancellation or modification of the sale certificate, the tax authority could not assert a lien over the property. The attachment was therefore unsustainable and the encumbrance entry was ordered to be deleted.

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Issues: Whether an attachment for sales tax arrears could be sustained against property purchased for value before the tax authority created the encumbrance, and whether the purchaser's title could be defeated despite an earlier sale certificate issued in execution proceedings.

Analysis: The property had been sold in recovery proceedings through the Debts Recovery Tribunal, a sale certificate had been issued in favour of the petitioner's vendor, and the petitioner purchased thereafter for valuable consideration. The tax authority initiated attachment only in 2006, long after the transfer. In such circumstances, absent cancellation or modification of the sale certificate, the department could not assert a lien over the property. The decision also applied the principle that a purchaser for value without notice of the tax charge is protected, and relied on the statutory protection recognised under Section 24(2) of the TNGST Act.

Conclusion: The attachment was unsustainable and was quashed; the petitioner was entitled to deletion of the encumbrance entry.

Final Conclusion: The property could not be proceeded against for the seller's sales tax arrears after it had already been transferred to a bona fide purchaser without notice, and the tax attachment was set aside.

Ratio Decidendi: A sales tax charge cannot be enforced against property already sold for value to a bona fide purchaser without notice, where the transfer preceded the departmental attachment and the earlier sale certificate remains unaltered.

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