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Judgment
H.G. Ramesh, J.—In this writ petition, the petitioner who is the auction purchaser of the property referred to in the auction notification dated 24-12-2004 (Annexure-A) is challenging the demand notice dated 5-4-2010 (Annexure-K) issued by respondent 1 demanding Rs. 79,14,081/- from the petitioner on the ground that the previous owner of the property referred to in the auction notification had not paid the amount due towards sales tax etc. I have heard the learned Senior Counsel appearing for the petitioner and the learned Counsel appearing for the respondents.
Learned AGA appearing for respondent 1 and learned Counsel appearing for respondent 2-KSFC refer to the following resolution passed in the meeting held on 29-11-2013 between KSFC and Department of Commercial Taxes:
"7. .................................
(1)(i) If the assets of the defaulter are already mortgaged to KSFC at the time of disbursal of loan which is in default, then the amounts due to KSFC shall be the first charge on such assets under mortgage. KSFC shall have preference in disposal of such assets to recover its dues and on surplus proceeds, if any, the Commercial Taxes Department shall have a claim.
(ii) If KSFC sells only the assets of the defaulter and not the defaulter''s business as a going concern, then the purchaser gets unencumbered right over such assets. In case of sale as a going concern, the dues of Commercial Taxes Department will persist and can be recovered from the transferee.
(iii) ..........................................".
It is stated that the above resolution has been approved by the State Government. In view of this, learned AGA, on instructions from the Joint Commissioner of Commercial Taxes (Legal), submits that the matter requires to be re-examined by respondent 1 as to whether only the assets of the defaulter was sold under the auction notification or the defaulter''s business as a going concern was sold. After such examination, he submits that respondent 1 will take action in the matter in accordance with the resolution referred to above.
Learned Senior Counsel appearing for the petitioner submits that the writ petition may be disposed of in the above terms. Learned Counsel appearing for respondent 3 also submits that the writ petition may be disposed of in the above terms by keeping all contentions of respondent 3 open. In view of the above, I make the following order:
The impugned notice dated 5-4-2010 (Annexure-K) is set aside. Respondent 1 is at liberty to re-examine the matter in the light of the resolution referred to above. If respondent 1 finds that the property was sold to the petitioner ''as the defaulter''s business as a going concern'', he is at liberty to initiate proceedings against the petitioner in accordance with law. All contentions of both the parties are kept open. It is clarified that this order shall not prejudice the legal rights of any of the parties herein. The writ petition stands disposed of in the above terms.