The transfer of property is valid if it occurs before assessment orders under tax laws, and cannot be deemed fraudulent without proper legal proceedings.

ORDER

Heard both sides.

2. The petitioner purchased the petition mentioned property vide registered sale deed dated 10.02.2023 from one Senthamarai Kannan for a consideration of Rs.22,34,000/-. It was registered as Document No.290 /2023 on the file of the Joint-1, SRO, Karur. The said property came to be attached vide communication dated 12.10.2023 issued by the first respondent to the second respondent. Questioning the same, this writ petition came to be filed.

3. The learned counsel appearing for the petitioner reiterated all the contentions set out in the affidavit filed in support of the writ petition and called upon this Court to set aside the impugned attachment order and grant relief as prayed for.

4. The first respondent has filed detailed counter affidavit and the learned Special Government Pleader took me through its contents. The stand of the first respondent is that the petitioner's vendor is an assessee from whom amounts were due under Tamil Nadu Goods and Services Act, 2017 and that the petitioner is not a bonafide purchaser for valuable consideration. The stand of the respondents is that the transaction is a case of fraudulent transfer. The respondents would contend that assessment orders had been passed against the petitioner's vendor and that is why, the property came to be attached. Since the petitioner's vendor knew about the impending assessment order and attachment, he managed to transfer the same in favour of the petitioner who is already known to him. The respondents submitted that the petitioner does not have the wherewithal to purchase the petition mentioned property. The respondents prayed for dismissal of the writ petition.

5. I carefully considered the rival contentions and went through the materials on record. There is no dispute that the property was mortgaged by the petitioner's vendor in favour of the bank vide document dated 07.03.2019. After discharging the said liability on 06.02.2023, the sale deed dated 10.02.2023 was registered in favour of the petitioner conveying the petition mentioned property. The petitioner's vendor was a works contract service provider. He registered himself with the department on 15.09.2017. The returns filed by the petitioner's vendor were verified and upon noticing certain discrepancies therein, DRC 01A intimation notices were issued. The assessment orders were issued against the petitioner's vendor on 20.02.2023, 14.03.2023, 24.05.2023, 25.05.2023, 19.06.2023 & 24.07.2023. The attachment order came to be made on 12.10.2023. Thus on 10.02.2023 when the petitioner purchased the property in question from her vendor, there was neither any assessment order passed against the vendor, nor the property was under attachment.

6. Section 81 of the Tamil Nadu Goods and Services Act, 2017 is as follows:-

“81. Transfer of property to be void in certain cases.- Where a person, after any amount has become due from him, creates a charge on or parts with the property belonging to him or in his possession by way of sale, mortgage, exchange, or any other mode of transfer whatsoever of any of his properties in favour of any other person with the intention of defrauding the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the said person:

Provided that, such charge or transfer shall not be void if it is made for adequate consideration, in good faith and without notice of the pendency of such proceedings under this Act or without notice of such tax or other sum payable by the said person, or with the previous permissi