Bona fide purchaser protection barred delayed recovery of sales tax arrears against a subsequent property buyer.

Recovery of sales tax arrears from a subsequent purchaser was held unsustainable where the purchaser acquired the property for adequate consideration without notice of pending revenue proceedings. Under the Tamil Nadu General Sales Tax Act, 1959, section 24 creates the tax charge, while section 24-A voids only transfers made with intent to defraud the revenue; the statutory proviso protects bona fide transfers without notice. Because the purchaser had bought the property years before the notice and the recovery action was initiated only after prolonged inaction against the defaulter, the impugned notice was quashed.

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Issues: Whether the notice issued for recovery of sales tax arrears from a subsequent purchaser of the property was sustainable, and whether the transfer was protected under the statutory exception for a sale made for adequate consideration without notice of the pending revenue proceedings.

Analysis: The proceedings related to arrears of sales tax under the Tamil Nadu General Sales Tax Act, 1959. Section 24 fastens the tax liability on the dealer and creates a charge on the property of the person liable to pay the tax, while Section 24-A declares a transfer void only where it is made with intent to defraud the revenue. The statutory proviso preserves a transfer made for adequate consideration and without notice of the pending proceedings or of the tax due. On the facts, the petitioner had purchased the property years before the impugned notice, and the recovery action against the third-party purchaser was initiated belatedly after prolonged inaction against the defaulter.

Conclusion: The impugned notice was unsustainable and was quashed. The petitioner succeeded.

Final Conclusion: Recovery against a bona fide purchaser could not be sustained in the absence of timely action against the defaulter, and the statutory protection for transfers made for adequate consideration without notice was applied.

Ratio Decidendi: A transfer for adequate consideration without notice of pending tax proceedings is protected, and delayed recovery action cannot be enforced against a bona fide purchaser unless the transfer is shown to be void under the statute.

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