TaxTMI 
TaxTMI 
2021 (7) TMI 1055
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....at promoter and they have no arrears of sales tax due to the Government. However, the first respondent issued a notice to the petitioner asking him to pay the sales tax arrears amount of Rs. 55,89,500/- accrued in the name of Madras Oil Tech Engineers Pvt. Ltd., for the Assessment Year 1992 - 93 under the CST Act, 1956. It is informed to the petitioners that they have purchased the property from one of the Directors. The petitioner sent a reply stating that they are no way connected with the arrears of sales tax and even at the time of their purchase of the said property, there was no such encumbrance or attachment by the Commercial Tax Department and thus any recovery of arrears of sales tax is to be made against the defaulter and not agai....
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....ond respondent. 5. This Court also elaborately considered the ambit, scope and width of recovery that may be initiated by invoking powers under Section 24 (2) of the Act in order dated 18.10.2019 in W.P.No.5849 of 2014, the relevant paragraphs are extracted hereunder: "15. Section 24 which deals with payment and recovery of tax provides that where tax is assessed and becomes payable under the Act, it shall be paid within 21 days from date of service of a demand notice. In cases of default, then the entire outstanding shall become a charge on the properties of the assessee or the person upon whom the liability vests. Thus, to this extent, the argument of the revenue that an automatic charge is created upon the assets of the defau....
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....4 of the Act is to be construed is that while an automatic charge is provided for under the provision, that by itself would not suffice to protect the interests of the Department. The requirement under Section 24(2) is specifically to bring to the notice of the public the fact that such encumbrance has been created upon a specific property, pursuant to statutory dues outstanding either by public proclamation on the land or by publication of such notice in the District Gazette. 18. In the present case, let us assume for a moment that an automatic charge has been created by operation of Section 24(1). Such charge, once created has remained within the domain of knowledge of only the Assessing Authority of the defaulter not having been....
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....ties in procedure will vitiate the sale. (iii) The land owner whose property illegally sold is entitled to move this court notwithstanding the remedy of the suit under section 59. (iv) In an auction sale the properties of the company can be brought to sale and not the properties of the directors of the company. (v) In case of sale of properties of third parties, they are entitled for the notice. 37. In the present case, the procedure for selling the properties by revenue recovery proceedings, the legal procedure, was not followed. No wide publicity was given. The time gap provided under section 36 and 38 of the TNRR Act was not followed. The right of the independent owners including the petitione....
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....an innocent purchaser. Having issued the orders of assessment as early as in December 1999, the Commercial Tax Department has neglected to protect its interests by not resorting to the procedure set out under 24(2). Had the procedure only been complied with, as contemplated under both the TNGST as well as the RR Acts, then the public would have been put to notice of creation of encumbrance and the interests of both the general public and the commercial taxes Department would have been adequately protected. 23. There is no allegation by the Department that the purchase of the property in question by the father of the petitioner from R2 was a collusive transaction. In any event, the petitioner being the third in line of ownership to ....
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....perties except land revenue and claims of the Land Development Bank in regard to the property mortgaged to it. 26. The priority as above, would come into effect only in the event the authority, in this case, the Commercial Tax Department, had been vigilant enough to put into motion the procedure set out under the RR Act and not otherwise. The meaning of the term 'charge on the property' which is also found in Section 100 of the Transfer of Property Act, 1882 (in short 'T.P.Act') is, a simple mortgage. Section 100 of the T.P. Act reads as follows: ' 100.Charges-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 t....