Mrs. Chitra Venkataraman, J. - The petitioner seeks the issue of a writ of certiorari to quash the proceedings dated July 18, 2008 in ROC-2192/99-A3 from the Commercial Tax Officer, Madurai, in respect of the tax dues from a defaulter for the period 1993-94 to 1997-98.

It is seen that in respect of the tax arrears of a defaulter - assessee, the respondent herein issued notice in form IV on August 26, 1999 under the Revenue Recovery Act, 1864 and attached the property of the assessee. The attachment was published in the District Gazette on December 8, 2000 and notice as to bring the property for sale was published in the newspaper on March 4, 2001. Placing reliance on the decision in Electronics Trade and Technology Development Corporation Limited v. State of Rajasthan reported in [1999] 115 STC 545 (RTT) that the State Government's dues have the first charge over any other arrears, the respondent issued notice to the petitioner in form B6 and called upon the petitioner to remit within fifteen days the amount realised by the bank towards its dues by auction sale of the said property given as security along with interest at two per cent per month in terms of section 24(3) of the Tamil Nadu General Sales Tax Act, 1959. Since there was no response from the petitioner - bank, a reminder was sent on March 10, 2008. On March 24, 2008, the petitioner - bank replied contending that the property in 228-C, Chinnakadai Street, Madurai, was mortgaged by one Somalingam, the proprietor of Ashok Jewels, as early as October 29, 1993. Since there was default on the part of the borrower, the petitioner filed a suit before the Debts Recovery Tribunal and in execution of the decree obtained, the mortgaged property was sold in auction sale and the auction sale was confirmed by a registered certificate dated November 20, 2006. Since the auction purchaser was a bona fide purchaser for value entitled to protection under section 41 of the Transfer of Property Act, 1882, the sale could not be questioned even otherwise. It was pointed out that the mortgage fetched a sum of Rs. 14,30,000 (rupees fourteen lakhs and thirty thousand only) only as against the recovery certificate issued by the Debts Recovery Tribunal to the tune of Rs. 47,37,929 (rupees forty seven lakhs thirty seven thousand nine hundred and twenty nine only). The petitioner further contended that section 24 of the Tamil Nadu General Sales Tax Act, 1959 provided for a charge on the asset of the defaulting assessee and does not provide for the charge on sale proceeds. Hence, the sale proceeds could not be traced for recovery.

The petitioner also contended that the decision in Electronics Trade and Technology Development Corporation Limited v. State of Rajasthan reported in [1999] 115 STC 545 (RTT) relied on by the respondent, related to the case of transferee (auction purchaser) purchasing not only the assets but also the entire business of the defaulter on "as is where is" basis. The respondent, however, replied on May 7, 2008 and supported their action in terms of section 26 of the Act. This was replied on June 6, 2008 by the petitioner that section 26 of the Tamil Nadu General Sales Tax Act or section 45 of the Tamil Nadu Value Added Tax Act, 2006, have no application and resisted the action of the respondent.

Since the respondent rejected the claim of the petitioner, the present writ petition is filed before this court contending that the mortgage in favour of the petitioner is much prior to the demand raised. Hence, the question of the petitioner's charge being defeated by reason of section 24 of the Act does not arise. In this connection, learned counsel for the petitioner placed reliance on the decision of the honourable apex court in Dena Bank v. Bhikhabhai Prabhudas Parekh & Co. reported in [2000] 120 STC 610; [2000] 4 CTC 170 that the priority of the charge available to the State cannot supersede the commercial transactions under which the property had already been subjected t