Bona fide purchaser protection limits sales tax charge enforcement against SARFAESI-acquired secured property absent notice.

A statutory sales tax charge could not be enforced against purchasers who acquired secured property under SARFAESI for value without actual or constructive notice of the higher dues, unless the statute expressly created such priority. The purchasers were not successors in business of the defaulting company, so joint and several liability under the sales tax law did not arise. The Court also noted that constructive notice cannot be presumed merely from the existence of the charge, and that the later amendment giving priority to secured creditors supported this limited protection. Enforcement was therefore confined only to the amount already reflected in the revenue record.

---

---

Issues: Whether the Sales Tax Authorities could enforce their statutory charge against a purchaser who bought the secured property under SARFAESI without actual or constructive notice of the sales tax dues, save to the limited extent reflected in the revenue record.

Analysis: The property was sold by the secured creditors under the SARFAESI Act, and the purchase was completed before the higher sales tax liability was brought to the petitioners' notice. The Court applied the settled principle that a charge cannot be enforced against a transferee for consideration without notice, unless the statute expressly provides otherwise. The petitioners were not the successor in business of the defaulting company, and therefore the joint and several liability contemplated by the sales tax law did not arise. The Court followed the principle that constructive notice cannot be presumed merely because the charge exists, and relied on the binding effect of the Supreme Court's exposition on enforceability of charges against bona fide transferees. The later amendment introducing priority for secured creditors was also noticed as supporting the limited relief.

Conclusion: The Sales Tax Authorities could not recover the dues of the defaulting company from the petitioners by enforcing the charge on the property, except to the extent of the amount already reflected in the record.

---