TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 601
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....said Kamalanathan had also obtained an encumbrance certificate from the Registration Department on 19.04.2012 for the period from 01.01.1987 to 18.04.2012. and sold the property to the Petitioner on 18.10.2012 vide registered Document No.10664 of 2012. 3. The Petitioner earlier applied for an encumbrance certificate on 12.10.2012 i.e. 6 days prior to the purchase of the property from the said Kamalanathan. It did not reflect any charge in favour of the respondent Commercial Tax Depatment. After the property was purchased by the Petitioner on 18.10.2012, the First Respondent issued the impugned notice dated 29.04.2016 seeking to recover the dues from the defaulting asseessee namely M.Latha who was in arrears of tax for a total sum of Rs. 47,46,216/- to the First Respondent (Commercial Tax Department). 4. The Petitioner had given a representation to the impugned notice on 04.07.2016 explaining the position stating that the Petitioner was a bona fide purchaser of the property and that in both the Encumbrance Certificates obtained by the Petitioner's vendor and in Encumbrance Certificate obtained by the Petitioner, there was no charge was reflected as having created in favour of ....
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....the 1st Respondent submits that the first respondent had registered the charge as early as July 2011 with the 2nd respondent. In any event, Encumbrance Certificate obtained by the petitioner was much prior to the purchase of the property by the Petitioner on 18.10.2012. Therefore, the Petitioner cannot plead ignorance and bonafide purchase. 9. The learned counsel for the 1st respondent would also submit that apart from getting Encumbrance Certificate, the Petitioner ought to have made a physical search of records at the 2nd respondent Registration Department about the property before taking a decision to purchase the said property, which was the subject matter charge. Having failed to take these steps, the Petitioner cannot rely on the Encumbrance Certificate by pleading that he is a bona fide purchaser of the property. 10. I have heard the arguments advanced on behalf of the learned counsel for the petitioner and learned Government Advocate (Tax). I have also produced the documents filed by the petitioner and the case laws submitted on behalf of the petitioner in support of the relief in the present writ petition. I have also considered the counter filed by the respondent No. 1....
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....as not made specifically about municipal dues. Apparently he was not informed about the arrears of municipal taxes. This seems to us explainable on the ground that the receivers had, after securing appropriate orders, for some reason not clear on the record, omitted to pay the arrears of municipal taxes and they were, therefore, reluctant to disclose the lapse on their part. On these facts and circumstances we do not think that the plaintiff could reasonably be fixed with any constructive notice of the arrears of municipal taxes since 1949. 13. The law as discussed by the Hon'ble Supreme Court in the context of Section 3 and Section 100 of T.P.Act, 1882, is as follows : '' Section 100 of the Transfer of Property Act dealing with "charges" provides: "100. Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge. Nothing in this section applies to the charge of....
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....der Section 51 of that Act, and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of that Act. Explanation II.-Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Explanation III.-A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material: Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud." 11.Now the circumstances which by a deeming fiction impute notice to a party are based, on his wilful abstention to enquire or search which a person ought to make or, on his gross negligence. This presumption of notice is commonly known as constructive notice. Though originating in equity this presumption of notice is now a part of our statute and we have to interpret it as such. ....
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....pra have not considered the decision of the Honourable Supreme Court in Ahmedabad Municipal Corporation of the City of Ahmedabad vs Haji AbdulGafurHusseinbhai, AIR 1971 SC 12. 16. It was held that section 24 (2) of the Tamil Nadu General Sales Tax Act, 1959 does not provide anything contrary to section 100 of the Transfer of Property Act, 1882 and unless a provision is made in any statute contrary to the rule in Section 100 of the aforesaid Act, a bona fide purchaser for consideration without notice of charge is protected. Accordingly, the Division Bench of this Court concluded that the petitioner therein namely RK Steels was a bona fide purchaser. 17. The Full Bench of this Court in D.Senthil Kumar and others Versus Commercial Tax Officer, (2006) 148 STC 204 considered the issue as to whether charge created under TNGST Act was enforceable against transferee of the property. The Division Bench of this Court referred to proviso to Section 100 of the Transfer of Property Act, 1882 and concluded that charge may not be enforced against transferee if he/she had no notice of the same unless, by law the requirement of such notice has been waived. There the properties were auctioned thro....
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....rchaser purchasing a property without notice of charge and for valuable consideration is protected under a proviso to section 24-A of the TNGST, 1959, nevertheless, it requires to be proved whether such plea is available on facts of each case. 22. In my view, this can be established only before a Civil Court particularly in the light of the fact that already a prior charge was registered during July 2011 by the 1st respondent even before the petitioner's vendor purchased the property on 4.8.2011 vide registered document No. 7260/2011. 23. In this case, the 1st respondent have taken categorical stand that a charge was created in their favour as early as July 2011 and therefore the petitioner's vendor's purchase on 4.8.2011 was itself not a bonafide purchase and the fact that the property changed hands within a period of 14 months in favour of the petitioner shows that the purchase by the petitioner may or may not be bonafide purchase. 24. If the purchase by the petitioner's vendor was not bonafide, subsequent purchase by the petitioner from the said vendor may or may not be a bonafide. Therefore, it would require a proper trial and finding by a Civil Court. Further, mere reliance....