Statutory charge on property survives a suspicious family transfer made after notice of sales tax arrears.

Section 24-A of the Tamil Nadu General Sales Tax Act, 1959 voids a transfer or charge created after proceedings or arrears awareness when it is made to defeat revenue, unless the transferee proves adequate consideration without notice or prior approval. Here, the dealer had notice of the sales tax arrears before the sale, the conveyance followed shortly afterwards, and the transfer was within the family through a power agent. Those facts supported an inference of lack of bona fides, so the transfer was void against the revenue. The statutory charge under Section 24 also remained enforceable, allowing recovery of the arrears from the property.

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Issues: Whether the transfer of the subject property, made after the dealer had knowledge of the sales tax arrears and within the family circle, was void under Section 24-A of the Tamil Nadu General Sales Tax Act, 1959, and whether the revenue could enforce the charge against the property.

Analysis: Section 24-A of the Tamil Nadu General Sales Tax Act, 1959 renders a transfer or creation of charge void where it is made during the pendency or after completion of proceedings with intent to defraud revenue, subject only to the exceptions of adequate consideration without notice or prior permission of the assessing authority. The tax demand had been served on the defaulter before the sale, the transfer was effected within a short span thereafter, and the conveyance was between close family members through a power agent. These circumstances supported a strong presumption that the transaction lacked bona fides and was intended to defeat recovery of arrears. Section 24 also operates to create a statutory charge for recovery of tax dues.

Conclusion: The transfer was held void as against the revenue, and the charge on the property was upheld, enabling the department to proceed against the property for recovery of the arrears.

Ratio Decidendi: A transfer of property made by a tax defaulter after notice of arrears, especially in suspicious family transactions and without the statutory safeguards, is void against revenue under Section 24-A of the Tamil Nadu General Sales Tax Act, 1959, and the statutory charge remains enforceable against the property.

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