Bona fide purchaser protection limits enforcement of sales tax arrears charges where no fraud, notice, or collusion is shown.

A statutory charge or attachment for sales tax arrears cannot be enforced against a purchaser for value without notice unless the revenue shows fraudulent intent, collusion, or other facts taking the transfer outside statutory protection. Sections 24-A of the Tamil Nadu General Sales Tax Act, 1959 and 43 of the Tamil Nadu Value Added Tax Act, 2006 void only transfers made to defraud revenue, while their provisos preserve transfers for adequate consideration without notice; section 100 of the Transfer of Property Act, 1882 similarly protects a transferee for consideration without notice of the charge. On the stated facts, the purchasers had checked encumbrances, the Department proved no notice or fraud, and the vendors were not necessary parties.

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Issues: (i) Whether the vendors were necessary parties to the challenge against encumbrances and attachments created for sales tax arrears. (ii) Whether purchasers of the subject properties were protected as bona fide purchasers so as to prevent enforcement of the tax charge or attachment against them.

Issue (i): Whether the vendors were necessary parties to the challenge against encumbrances and attachments created for sales tax arrears.

Analysis: The challenge was directed against the encumbrances created over the properties, not against the underlying sales tax assessments on the vendors. There were no pleadings or material showing collusion, fraud, or connivance between the vendors and the purchasers. In the absence of such foundational allegations, and where the purchasers independently questioned the attachment affecting their title, the presence of the vendors was not indispensable.

Conclusion: The vendors were not necessary parties.

Issue (ii): Whether purchasers of the subject properties were protected as bona fide purchasers so as to prevent enforcement of the tax charge or attachment against them.

Analysis: Sections 24-A of the Tamil Nadu General Sales Tax Act, 1959 and 43 of the Tamil Nadu Value Added Tax Act, 2006 render transfers void only where they are made with intent to defraud the revenue, while the provisos protect transfers for adequate consideration without notice of the pending proceedings or tax demand. Section 100 of the Transfer of Property Act, 1882 also protects a transferee for consideration and without notice of the charge. On the facts, the purchasers had verified encumbrances before purchase, the Department failed to show notice, collusion, or fraudulent intent, and in several cases the alleged charge or encumbrance was created only after the sale. The jurisdictional fact needed to defeat the purchasers' protection was not established.

Conclusion: The purchasers were protected as bona fide purchasers, and the tax attachments could not be enforced against them.

Final Conclusion: The State's writ appeals failed, and the purchasers obtained relief against the encumbrances and attachments, with the attachment in the writ petition also directed to be lifted.

Ratio Decidendi: A statutory charge for sales tax arrears cannot be enforced against a purchaser for value without notice unless the revenue establishes the jurisdictional fact of fraudulent intent or notice so as to take the case outside the statutory protection for bona fide transferees.

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