Purchaser protection against vendor tax arrears limits recovery to the secured mortgage amount, not the full dues.

A purchaser of property was treated as protected from the vendor's sales tax arrears where the purchase was made for adequate consideration, without notice of the arrears, and not from the defaulting assessee itself. The property had been offered as security under Form XIX-B for a limited sum under the Tamil Nadu General Sales Tax Act, 1959, so the Department's claim could not extend beyond the secured amount. Section 24-A protected the purchaser on these facts, and the cited precedents were distinguished. The practical effect was that liability was confined to the mortgage security amount, after which the property stood free from encumbrance.

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Issues: Whether a purchaser of property can be saddled with arrears of tax due from the vendor's proprietary concern, and whether liability can be limited to the amount secured by the mortgage created in favour of the Commercial Tax Department.

Analysis: The property had been offered as security under Form XIX-B for a limited sum of Rs. 50,000 under Section 21 of the Tamil Nadu General Sales Tax Act, 1959. The petitioner purchased the property from the vendor's father for adequate consideration and without notice of the tax arrears, and the facts showed that the property was not purchased from the defaulting assessee itself. On these facts, the protection under Section 24-A of the Tamil Nadu General Sales Tax Act, 1959 was available to the petitioner, and the precedents relied on by the Department were found distinguishable.

Conclusion: The petitioner was not liable for the full arrears of tax of the defaulting concern, but was liable only to discharge the mortgage security amount of Rs. 50,000, after which the property would stand free from encumbrance.

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