2019 (11) TMI 1352 - HC - VAT and Sales Tax

Court sets aside property attachment orders, protects innocent purchasers, upholds lawful process

K. Madheswari D/o. Krishnamoorthy Versus The Commercial Tax Officer Musiri., The Assistant Commissioner (CT) (FAC) Rasipuram., The Sub-registrar

The court allowed both writ petitions, setting aside the attachment orders dated 27.02.2015 and 12.10.2010 on properties purchased by the petitioner ... Recovery of tax dues - attachment properties of the petitioner buyer - grievance of the petitioner is that when she purchased the property on 18.05.2010 earlier to the impugned orders of attachment, the authorities are not justified in making the impugned attachment orders, especially, when the petitioner is not the defaulter - HELD THAT:- The impugned orders of attachment were made in respect of the properties, over which, the defaulter has lost his title as on the date of attachments and that the petitioner has became the owner of the properties which is sought to be attached on the date of such attachments - It is not in dispute that the petitioner is not the defaulter and on the other hand, the above said person is the defaulter. The very same issue under similar facts and circumstances has been considered by this Court in P. SATHASIVAM VERSUS THE ASSISTANT COMMISSIONER (CT) , THE SUB-REGISTRAR THE OFFICE OF THE SUB-REGISTRAR UDUMALPET [2019 (2) TMI 69 - MADRAS HIGH COURT], wherein this Court after following several decisions of this Court allowed the writ petition and set aside the impugned proceedings. Petition allowed. Issues:Challenging orders of attachment dated 27.02.2015 and 12.10.2010 for tax dues recoverable from R.Ramesh trading as M/s.Sri Balaji Traders. Petitioner claims ownership of properties purchased prior to attachment orders.Analysis:The petitioner filed two writ petitions challenging the attachment orders of their properties dated 27.02.2015 and 12.10.2010, made to recover tax dues from R.Ramesh trading as M/s.Sri Balaji Traders. The petitioner argued that they acquired the properties on 18.05.2010 before the attachment orders were issued, asserting that the attachments were unjustified as they were not the defaulters. The petitioner contended that the attachments were unlawful since, at the time of attachment, the vendor had lost rights to the properties, and the petitioner had become the rightful owner. The petitioner relied on a previous court order from W.P.No.1440 of 2019 that favored a similar issue in their favor.The court noted that the petitioner indeed purchased the properties before the attachment orders, which the Additional Government Pleader did not dispute. Considering the circumstances, it was clear that the attachments were made on properties where the defaulter had lost ownership rights at the time of attachment, and the petitioner had become the rightful owner. The court referenced a previous judgment where similar circumstances led to setting aside the impugned proceedings. The court emphasized that the petitioner was not the defaulter, and the properties were purchased without any encumbrances or previous attachments, aligning with legal precedents that protected bona fide purchasers in such cases.Based on the established legal principles and the facts of the case, the court allowed both writ petitions, setting aside the impugned proceedings. However, the court clarified that this decision did not prevent the tax department from pursuing the defaulter for tax dues through legal means. No costs were awarded, and connected miscellaneous petitions were closed. The court's decision was in line with protecting the rights of innocent purchasers and ensuring that attachment orders were lawful and justified.