A bona fide purchaser without notice of an encumbrance is protected under Section 24-A of the TNGST Act, 1959, reinforcing the importance of constructive notice criteria.

ORDER

Heard both sides.

2.The writ petitioner purchased the petition mentioned property from the legal heirs of one Sambarasuran vide sale deed dated 07.02.2011. It was registered as Document No.836/2011 on the file of the Sub Registrar, Bodinayakanur. It turned out that the said property was already attached by the Sales Tax Department towards tax arrears of Sambarasuran when he was alive. This attachment made by the first respondent was entered in the encumbrance register vide Entry No. 3/2020 dated 23.10.2020. When the petitioner came to know of the same, he represented to the first respondent seeking release of the property from the attachment. The first respondent vide communication dated 18.09.2024 informed the petitioner that the property would be brought to public auction and that steps were being taken. Challenging the said communication, this writ petition has been filed.

3.The petitioner's claim is that he is a bonafide purchaser for value without notice of the attachment. The learned counsel invokes the proviso to Section 24-A of the Tamil Nadu General Sales Tax Act, 1959. He relied on the decision of the Hon'ble Division Bench reported in 2018 (2) TMI 1865 (M.Thirumaran Vs. The Commercial Tax Officer) in support of his contentions and submitted that the impugned memo issued by the first respondent deserves to be quashed.

4.Per contra, the learned Additional Government Pleader for the first respondent submitted that the impugned communication has to be sustained. He questioned the very maintainability of the writ petition. He took me through the contents of the counter-affidavit filed by the first respondent. According to him, the bona fides of the writ petitioner can be tested only before the jurisdictional Civil Court and that no relief can be granted in exercise of jurisdiction under Article 226 of the Constitution of India. He placed reliance on the decisions of the Hon'ble Division Bench reported in 2025 (1) CTC 137 (T.Palanisamy Vs. Commercial Tax Officer) and 2025 (2) CTC 233 (D.K.Sadasivam Vs. Commercial Tax Officer). He would add that the attachment of the petition mentioned property was made way back in the year 2005 and that it was also published in the government gazette on 25.01.2006. He would also add that the communication was contemporaneously sent to the registering authority to enter the attachment in the encumbrance register. He submitted that for the negligence on the part of the registration department, the Commercial Tax Department cannot suffer. He would argue that publication in the gazette made in the year 2006 would operate as constructive notice to the world at large.

5.I carefully considered the rival contentions and went through the materials on record. Two issues arise for consideration. The first is whether this writ petition is maintainable. The second is with regard to the scope of the proviso to Section 24-A of the TNGST Act, 1959. Before answering these issues, let me summarize the facts leading to the filing of the writ petition.

6.One Thiru.Sambarasuran had committed default and was in sales tax arrears to the tune of Rs.12,83,56,600/-. This liability had accrued during the period from 1993-94 to 1997-98 under TNGST Act, 1959 as well as the CST Act, 1956. Assessment orders had been passed. The Commercial Tax Officer, Bodinayakkanur issued distraint order in Form No.1 under the Tamil Nadu Revenue Recovery Act, 1864 on 17.04.2003. Notice of attachment under Section 27 of the Act was issued on 08.08.2005. It was also published in Madurai District Gazette dated 08.10.2005. Steps were taken to bring the property to sale. It appears that the said efforts did not