TaxTMI 
TaxTMI 
1966 (1) TMI 71
X X X X Extracts X X X X
X X X X Extracts X X X X
....emises No. 10-A, Dandayuthapani Street, Madras-17, belonged formerly to one Ranganatham Chetty who sold it on 18th April, 1958, to one Ramaswami, and from Ramaswami the first petitioner purchased it on 11th May, 1961. This Ranganatham Chetty had some business as a dealer both in Madras City and at Tindivanam in South Arcot, and there were arrears of sales tax due by him, for an amount of Rs. 6,750 and odd, for the years 1954-55 to 1956-57. On the ground that Ranganatham Chetty did not have sufficient means to pay the sales tax, the aforesaid house property was proposed to be attached and sold under the provisions of the Madras Revenue Recovery Act, (Madras Act 2 of 1864). For this purpose the Special Assistant Commercial Tax Officer for Sal....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the whole of the amount outstanding on the date of default, shall become immediately due, and it shall be a charge on the properties of the defaulter. In view of these provisions, the impugned proceedings were quite legal and valid. In her affidavit the first petitioner appears to have relied upon the saving clause in section 100 of the Transfer of Property Act which states that no charge whether imposed by operation of law or by act of parties shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge, save as otherwise expressly provided by any law for the time being in force. This claim was also denied by the first respondent in the counte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the first petitioner, Kannamba, is not the transferee of the business of Ranganatham Chetty. She is a subsequent transferee of an item of immovable property belonging to him. She could not be viewed as a defaulter so far as the assessment to sales tax is concerned. No doubt section 10 of the Sales Tax Act of 1939 imposes a charge on the property of a dealer for the arrears of sales tax due by him. But here we are not dealing with a case of the enforcement of such a charge. It is only if we are dealing with a case of enforcement of such a charge that it will be necessary to examine the question, whether the first petitioner will be entitled, as a transferee for consideration without notice, of the benefit of the saving clause in section 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m Chetty at the time of the attachment, and there is no other provision in the statute by which the first petitioner could be construed as a defaulter for the sales tax arrears due by Ranganatham Chetty. Rule 21-A of the General Sales Tax Rules framed under the 1939 Act, and section 27 of the 1959 Act permit the transferee of the business of a dealer, to be considered as a defaulter for the arrears of sales tax due by the transferor in certain contingencies, but such an extended meaning of the term "defaulter" cannot be availed of to make the transferee of the defaulter's immovable property liable for the demand. The position however is different in the case of an arrear of land revenue due in respect of a piece of land. Section 3 of Act 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....due upon his land on the date on which it falls due, and to section 4, which says that when the whole or part of the cist shall not be so paid, the amount or its unpaid portion shall be deemed to be an arrear of revenue. Then they observed that arrear of revenue remains an arrear until it is paid, and the landholder or its registered proprietor is liable to pay it, and when the plaintiff (in the case before them) became the registered proprietor, there were arrears of revenue due on the village and he, as the landholder, became liable to pay them to the Collector and on failure to pay them he became a defaulter. They also derived support from section 2 of Act 1 of 1890, the Revenue Recovery Act (Central), wherein the word defaulter is defin....