LAWS(MAD)-2019-9-732

FOODS, FATS AND FERTILIZERS LIMITED AND ORS. Vs. DEPUTY COMMISSIONER, COMMERCIAL TAXES, KANCHEEPURAM AND ORS.

Decided On September 25, 2019
Foods, Fats And Fertilizers Limited And Ors. Appellant
V/S
Deputy Commissioner, Commercial Taxes, Kancheepuram And Ors. Respondents

JUDGEMENT

(1.) The petitioners are the purchasers of properties bearing Survey Nos.5/1D1, 5/1D3A, 6, 1/3A, 1/3B, 5/1D2, 1/3C, 5/1D3 and 6, situated at Pukkathurai Village, Maduranthakam Taluk, Chengalpattu District ('property in question'). The property in question had been purchased by the petitioners under an auction sale conducted by the third respondent, Karnataka Bank Limited ('Bank'). Pursuant to the purchase thereof, the Commercial Tax Officers/ the first and second respondents, (R1 and R2), appear to have issued an order of attachment dated 19.01.2010 followed by a sale notice dated 15.04.2010, impugned in this Writ Petition.

(2.) The brief sequence of dates and events is that the fourth respondent, (R4), an assessee in terms of the provisions of the Tamil Nadu General Sales Tax Act, 1959 ('TNGST Act'), was admittedly in arrears of commercial tax as well as in default of repayments of financial accommodation received from the Bank. The property in question had been offered as security by R4 to the Bank that had registered a charge on 10.05.2006 before the appropriate Sub-Registrar. This is not disputed.

(3.) In respect of the commercial tax arrears, admittedly no charge was initially created and the stand of R1 and R2 is that an automatic charge was created by operation of Section 24 (2) of the Act that continued in force till such time the charge was actually created and registered on 23.07.2007. The charge created by the Commercial Taxes Department is subsequent to the registration of charge by the Bank. The petitioners, upon noting the auction sale notice participated in the sale, purchasing the property in question on 25.03.2008. A sale certificate has been issued by the Bank. The petitioners are two companies of the same group entites. The terms of auction provided that the confirmation of auction could be either in favour of the purchaser or its nominee and upon nomination of the second petitioner by the first, the sale certificate was issued in the name of the former.