Allowed

M/S Bismillah Industrial Steel v. the Commercial Tax Officer

Madras HC6 Jul 2021WP/30677/2007

Case brief

AI extract

What is this about?

The High Court quashed a commercial tax demand notice and attachment of land issued in 2007. The court held that the sale of the property in an auction to recover bank dues had vested title in the petitioner in 2006. The notice, issued over a year later without knowledge prior to the auction, was unsafe and violated the Debt Recovery Act provisions protecting the vendee's title.

What did the court decide?

Writ petition allowed; impugned order dated 30.08.2007 regarding proceedings R.C.No.4344/1987 A3 is quashed. Connected miscellaneous petition closed.

M/S Bismillah Industrial Steel Vs the Commercial Tax Officer — Property and Title | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 06.07.2021

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CORAM

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THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM

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W.P.No.30677 of 2007 and M.P.No.1 of 2007

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M/s.Bismillah Industrial Steel Suppliers, A partnership firm represented by its Partner, Mr.Kaleelulliah, Son of Syed Mohamed, No.10 A, Coramandal Town, Menambedu Road, Chennai – 600 098.

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.. Petitioner

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Vs.

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Commercial Tax Officer, Villivakkam Assessment Circle, No.5, High Court Colony, Chennai – 600 049.

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The Recovery Officer, Debts Recovery Tribunal – 1, 6^th Floor, Spencers Towers, No.770 – A, Anna Salai, Chennai – 600 002.

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M/s.Chemee Boilers Madras, rep. by its Managing Partner, P.L.Karunakaran, No.59 – B, Industrial Estate, Ambattur, Chennai – 600 098.

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P.L.Karunakaran

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K.Devika Rani

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Indian Bank, Asst. Recovery Management Branch – 1, Commander in Chief Road, Egmore, Chennai.

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https://hcservices.ecourts.gov.in/hcservices/

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The Commissioner, Commercial Tax Office, No.1, PAPJM Building, Greams Road, Nungambakkam, Chennai 600 006. .. Respondents

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(R7 suo-motu impleaded vide order of this Court dated 24.06.2021 made in W.P.No.30677/2007)

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Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, calling for the entire records of the first respondent in R.C.No.4344/1987 A 3 and quash the Demand notice Prior notice attachment of land dated 30.08.2007 and all other consequential proceedings and allow this Writ Petition with costs.

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For Petitioner : Mr.V.John Acquinas

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For Respondents : Mr.Veluchamy Government Advocate for R1 & R7 No appearance for R2 to R6

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O R D E R

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The demand prior to attachment of land issue in Form - 4 in proceedings dated 30.08.2007 is under challenge in the present writ petition.

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The petitioner is a registered partnership firm and carries on business in buying and selling of Iron and steel and other allied products.

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The third respondent is a partnership firm and the respondents four and five are its partners. The industrial plot in Plot No.31/A 18 in the developed plot at Ambattur Industrial Estate Chennai at Korattur Village was originally owned by M/s Chemee Boilers, the 3^rd respondent herein. The 3^rd respondent committed default in respect of certain facilities availed from their bankers, namely Indian Bank, the 6^th respondent herein. The 6^th respondent had instituted recovery proceedings before the Debts Recovery Tribunal – I in T.A.No.648 of 1997 against the 3 to 5 respondents to recover its outstanding dues. The Debts Recovery Tribunal – I, by its order dated 01.07.2003 has issued recovery certificate against the 3^rd respondent.

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Pursuant to the order passed by the Debts Recovery Tribunal – I, the 2^nd respondent herein issued Recovery Certificate in DRC No.187/2003 and the properties of the 3^rd respondent in the said plot at Ambattur Estates, was ordered to

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https://hcservices.ecourts.gov.in/hcservices/

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be sold in public auction to recover the dues of the 3 to 5 respondents. The Public Auction was held on 29.11.2005 before the 2^nd respondent. The petitioner was the successful bidder in the Auction sale and the total consideration being Rs.1,28,00,000/-. The petitioner deposited the entire amount with the 2^nd respondent. The Auction sale was confirmed in favour of the petitioner and the petitioner has taken possession of the property and enjoyment.

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Under these circumstances, the respondents issued the impugned notice on 30.08.2007, after a lapse of more than one year stating that the 3rd respondent / M/s.Chemee Boilers Madras, is defaulter in demand of sales tax arrears. The petitioner has stated that they have no knowledge about any such default nor there was an attachment at the time of auction purchase of the subject property by the petitioner. Therefore, the impugned demand notice is illegal.

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The learned Government Advocate appearing on behalf of the respondents 1 & 7, submit that the notice was issued on 30.08.2007, which reveals that the sales tax arrears are to be paid by the 3^rd respondent. Thus, the notice is in accordance with the provisions of the statute and the writ petition is to be dismissed.

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This Court is of the considered opinion that in respect of the subject property, the Indian Bank approached the Debt Recovery Tribunal and after passing an order the public auction was conducted, sale certificate was issued and possession was also handed over to the petitioner in the year 2006 itself. However, after a lapse of more than one year, first time the respondent issued the impugned demand notice in proceedings dated 30.08.2007.

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This being the factum, the sale was already violated pursuant to the provisions of the Debt Recovery Act, cannot be now unsettled and therefore, in view of the said factum, the impugned order passed by the first respondent in proceedings R.C.No.4344/1987 A3, dated 30.08.2007 is quashed and the writ petition stands allowed. No costs. Consequently, connected miscellaneous petition is closed.

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Sd/Assistant Registrar

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//True Copy//

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Sub Assistant Registrar

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Pns

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https://hcservices.ecourts.gov.in/hcservices/

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To 1. Commercial Tax Officer, Villivakkam Assessment Circle, No.5, High Court Colony, Chennai – 600 049. 2. The Recovery Officer, Debts Recovery Tribunal – 1, 6^th Floor, Spencers Towers, No.770 – A, Anna Salai, Chennai – 600 002. 3. M/s.Chemee Boilers Madras, rep. by its Managing Partner, P.L.Karunakaran, No.59 – B, Industrial Estate, Ambattur, Chennai – 600 098. 4. Indian Bank, Asst. Recovery Management Branch – 1, Commander in Chief Road, Egmore, Chennai. 5. The Commissioner, Commercial Tax Office, No.1, PAPJM Building, Greams Road, Nungambakkam, Chennai 600 006. +1cc to Mr.V.John Acquinas, Advocate, S.R.No.31858 UM(CO) HS(02/08/2021)

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W.P.No.30677 of 2007

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https://hcservices.ecourts.gov.in/hcservices/

M/S Bismillah Industrial Steel v. the Commercial Tax Officer

Case brief

What is this about?

What did the court decide?

M/S Bismillah Industrial Steel v. the Commercial Tax Officer

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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