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of <h1>Court rules in favor of Petitioners in Sales Tax case under Tamil Nadu General Sales Tax Act.</h1> The Court ruled in favor of the Petitioners in a case concerning Sales Tax dues and the enforcement of a charge under the Tamil Nadu General Sales Tax ... Liability of Sales Tax Dues - enforceability of charge against property - Section 24(1) of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- It is clear that the Petitioners purchased the property from the erstwhile owners/assessee of the Sales Tax Department on 09.08.2000. It is also clear from the E.C. dated 13.03.2000 that the charge in favour of the Sales Tax Department is not reflected in the E.C. Therefore, there are no materials to conclude that the Petitioners were put on notice either actual or constructive, about the statutory charge in favour of the Sales Tax Department. The limited issue that arises for consideration is whether the charge under Section 24(1) of the TNGST Act can be enforced against the property in the hands of the Petitioners. This issue is no longer res integra and it was decided that such a charge cannot be enforced against a transferee without notice. The principles of law that can be gleaned in respect of the enforcement of charges, including statutory charges - petition allowed. Issues:Challenge to Notice dated 15.09.2006 under Section 25 of the Tamil Nadu Revenue Recovery Act,1864 regarding Sales Tax dues from vendors; Enforcement of charge under Section 24(1) of the Tamil Nadu General Sales Tax Act, 1959 against property in hands of Petitioners.Analysis:The Writ Petition was filed to quash a Notice dated 15.09.2006 regarding Sales Tax dues from vendors. The Petitioners purchased properties from vendors and were later surprised by the notice from the Respondent demanding payment. The Petitioners argued that they were bona fide purchasers for valuable consideration without notice of the charge, thus the charge cannot be enforced against them. They provided Sale Deeds, an Encumbrance Certificate, and an Indemnity Bond to support their case.The Respondent claimed a statutory charge over the property under Section 24(1) of the TNGST Act due to non-payment of tax dues by the previous owner. They argued that any transfer by the defaulting assessee is void under Section 24A of the TNGST Act. Both parties' submissions, documents, and oral arguments were considered.The Court found that the Petitioners purchased the property without notice of the charge held by the Sales Tax Department. Referring to legal precedents, the Court noted that a charge cannot be enforced against a transferee without notice unless expressly permitted by law. The Court cited previous judgments where it was held that charges, including statutory ones, can only be enforced against a transferee without notice if the relevant statute explicitly allows it. As Section 24A of the TNGST Act does not provide for enforcement against a transferee without notice, the Court ruled in favor of the Petitioners.Consequently, the Court allowed the Writ Petition, quashed the Impugned Notice dated 15.09.2006, and decided that there would be no costs imposed on either party. However, the Respondent was given the liberty to pursue appropriate legal proceedings against the assessee to recover its dues in accordance with the law.
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