M/S.Cholamandalam Investment And Finance Company Limited vs. The Assistant Commissioner

Facts

M/s. Cholamandalam Investment and Finance Company Limited (Petitioner) is challenging a recovery notice dated 08.11.2024 issued by the Assistant Commissioner (Respondent 1) and seeking a direction to the Sub Registrar (Respondent 2) to remove an attachment endorsement on certain sale deeds. The Petitioner had advanced loans to Respondents 3 to 5, secured by property. Due to non-payment, the loan became an NPA, and the property was e-auctioned on 15.10.2024 to Respondent 6 for Rs. 57,70,000/-. The Petitioner issued a sale certificate on 09.11.2024. However, Respondent 1's recovery notice, citing GST dues, created an attachment, preventing Respondent 6 from registering the sale certificate and the Petitioner from realizing sale proceeds. The Petitioner is willing to pay the outstanding amount once registration is facilitated.

Held

The Court noted the submissions of both parties and acknowledged that the petitioner institution is ready to pay the remaining amount. Consequently, the Court directed the petitioner to pay the remaining outstanding government dues of Rs. 21,99,700/- within a period of four weeks from the date of receipt of a copy of the order. This payment is intended to facilitate the registration of the sale certificate in favour of the sixth respondent. The Court did not explicitly quash the recovery notice but disposed of the writ petition with the aforementioned direction, effectively resolving the immediate impediment to the sale registration. The primary issue addressed was the petitioner's ability to clear the dues to enable the sale registration.

Key Issues

1. Whether the recovery notice issued by the first respondent, dated 08.11.2024, is valid and enforceable in light of the prior e-auction of the property by the petitioner institution? (Question of law). Petitioner's arguments: The petitioner contended that the attachment endorsement created by the first respondent over the property, which was subsequently sold in an e-auction, is causing hindrance to the registration of the sale certificate in favour of the successful bidder (Respondent 6). This prevents the petitioner from realizing the sale proceeds. The petitioner expressed readiness to pay the outstanding amount once the sale certificate is registered. Revenue's arguments: The learned Government Advocate for the first respondent submitted that the outstanding amount payable by the petitioner institution is Rs. 35,01,070/-. The property was sold for Rs. 57,00,000/-. Therefore, as per Section 79 of the TNGST Act, 2017, read with the CGST Act, the petitioner is liable to pay the remaining amount of Rs. 21,99,700/- towards government dues. Recovery proceedings were initiated under Section 79 of the TNGST Act, 2017, read with the CGST Act.