A.GUNASEKARAN Vs. DEPUTY COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) Heard Mr.A.P.Srinivas, learned counsel for the petitioner, Mrs.G.Dhanamadhri, learned Government Advocate for respondents 1 to 3, M/s.Shivakumar and Suresh, learned counsels for the 6th respondent, M/s.R.Varalakshmi, learned counsel for the 7th respondent and Mr.Vamana Ramalingam, learned counsel for the 8th respondent. Though notice has been served on respondents 3 and 4 and their names are printed, none appears for them.

(2.) The petitioner seeks for issuance of a Writ of Certiorarified Mandamus, to quash the notice of attachment issued by the first respondent and the consequential sale notice dated 30.12.2005, bringing the property purchased by the petitioner for sale, for recovery of the sales tax dues payable by the fourth respondent. The impugned notice of attachment under Section 27 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the TNGST Act") has been issued in the name of the fourth respondent/defaulter, describing them as the owner of the property in Pakkam Village at Thirunindravur, Sriperumbudur Taluk, Thiruvallur District. It is seen that as per the notice, the fourth respondent is due and payable a sum of Rs.Three Crores as arrears of sales tax and interest and other charges.

(3.) The question would be, whether the first respondent had jurisdiction to issue the impugned notice of attachment and the consequential notice of sale under Section 36 of the TNGST Act. On consideration of the factual position of the case, the answer to the questions should be in the negative, that is, in favour of the petitioner and against the Commercial Taxes Department. This is so because, the property, which is subject matter of attachment/sale, was originally owned by the fourth respondent offered as a security for a loan transaction, which was availed by the fourth respondent from the sixth respondent Bank. The fourth respondent committed default in repayment, as a result of which, the sixth respondent initiated recovery proceedings under the provisions of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 (in short "RDDBFI Act") by approaching the Debt Recovery Tribunal-I, Principal Bench at Chennai in DRC No.105 of 2001. When the matter was pending before the Debt Recovery Tribunal (in short "DRT"), the Commercial Taxes Department made a claim for the arrears of sales tax together with penalty from the defaulting company. It was stated by the Commercial Taxes Department that the subject property was attached by the Department vide proceedings dated 31.10.2003 and proclaimed for auction sale on 03.04.2004 (orders impugned in this writ petition).