D SENTHIL KUMAR Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) ADMIT. The learned Special Government Pleader appearing for the respondents waives service. By consent, the appeal is taken up for hearing.

(2.) IN this appeal filed against the order of a learned single Judge passed in a writ petition under Article 226 of the Constitution of india, the question relates to the liability of an auction purchaser of a property at a public auction towards the arrears of sales tax due under the tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as the TNGST act), which dues are a statutory charge on the property sold, and of which the purchaser had no actual notice. By the order under appeal, the learned single judge held that the issue is covered by the judgment of a Division Bench of this Court in the case of N. Padma Coffee Works & Others Vs. Commercial Tax officer, Rock Fort Assessment Circle, Trichy reported in (1999) 114 S. T. C. 494 and the contention that the appellants are bona fide purchasers has to be established only before a civil court by adducing proper evidence and not in a writ petition filed under Article 226 of the Constitution.

(3.) IN reply, the learned Special Government Pleader appearing for the Department submitted that since a charge over the property of the defaulting firm had been created under the TNGST Act, the appellants, as the transferees of the said property, hold the property subject to that charge. IN the alternative, the learned Special Government Pleader submitted that the Act creates a first charge on the property of the dealer or any other person for any amount of tax, penalty, interest, or other sum payable by a dealer or the other person under the Act, clearly giving priority to the statutory charge over all other charges on the property, including a mortgage and hence, the claim of the Sales Tax Department that their dues be paid from out of the proceeds of the sale of the property took priority over the claim of the Bank as a mortgagee of the property in question and therefore, the Department should be allowed to recover the amount due from the City Union Bank.