TaxTMI 
TaxTMI 
2019 (5) TMI 122
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....ed in the schedule to the Writ Petition by way of auction or otherwise for the alleged sales tax dues of the Fourth Respondent as mentioned in notice dated 27.09.2006. 2.The facts that are relevant for purposes of deciding this case are as under. The Tamil Nadu Small Industries Development Corporation (SIDCO) allotted Shed No.134 to the Fourth Respondent herein in response to Application No.9901. Thereafter, a Sale Deed dated 27.10.1994 (the First Sale Deed) was executed by SIDCO in favour of the Fourth Respondent whereby the aforesaid Shed No.134 was conveyed to the Fourth Respondent for a sum of Rs. 8,14,620/-. As per Clause 4 of the First Sale Deed, the vendor, i.e. SIDCO, covenanted that there is no encumbrance over the property a....
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.... under: "5.There is no express or implied condition or warranties of sale. Neither can reliance be had on any description nor will any complaint against the description be entertained." "16.The successful bidder has to pay the property tax, commercial tax and other dues to the government and other statutory and other liabilities, if any, in respect of the property sold." (emphasis added) 5.The recitals to the Second Sale Deed stipulated that the sale is on "as is where is" basis. In addition, clause 6 of the Second Sale Deed stipulated that there are no express or implied conditions of warranty in respect of the property conveyed under the sale deed. More importantly, clause 7 stipulated as follows: ....
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.... the tax liability was protected under the proviso to Section 24-A of the Tamil Nadu General Sales Tax Act, 1959 (the TNGST Act). He also referred to page 28 of the said judgment wherein the PADMA COFFEE WORKS CASE, (1999) 114 STC 494, was cited for the principle that a charge cannot be enforced against a transferee without notice. In particular, the learned counsel relied on the PADMA COFFEE WORKS Case to submit that unless the charge is registered in the registration department, it would not be possible for a prospective buyer to know if there is a charge over the property for any arrears of tax. In the instant case, according to the learned counsel for the Petitioner, the charge was not registered in the SRO concerned. Therefore, he subm....
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....t Respondent contended that the Petitioner herein is not a bona fide purchaser. Accordingly, he submitted that the Writ Petition is liable to be dismissed. 11.The affidavit, documents on record and oral submissions of all parties were carefully considered. 12.The terms and conditions of sale coupled with the Second Sale Deed, which is in favour of the Petitioner herein, make it abundantly clear that the purchaser is liable in respect of commercial tax dues. The Second Sale Deed further clarifies that the seller is not providing title warranties to the purchaser and this may be compared and contrasted with the First Sale Deed which contains a title warranty from SIDCO to the Fourth Respondent and does not impose liability for commercia....
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....ut notice of such tax or other sum payable by the dealer(emphasis added); or (ii) with the previous permission of the assessing authority" 13.When the documents on record are examined in the context of section 24-A of the TNGST Act, there is little doubt that the Petitioner herein was aware of the sales tax dues of the Fourth Respondent and was duly notified that he would be liable in respect thereof. Thus, he would not be entitled to any protection as a bona fide purchaser. The judgments of the Division Bench of this court in the RK STEEL case and GUPTA AND COMPANY case are in the factual context of a bona fide purchaser who was unaware about the sales tax dues. Therefore, the said cases do not advance the cause of the Petition....