I need urgent advice
KETAN DESAI
(Querist) 11 January 2013
This query is : Resolved
Dear Sir.
I need URGENT help & advice.
I bought a Flat in an apartment. Flat was in the name of Mr X ,Mrs Y (Wife) and Ms.Z (MARRIED Daughter).
Mr.X died and his legal heirs Mrs.Y (Wife), Ms.Z (daughter) and Mr.AB (His Son who entered into the shoes of deceased to share the property) sold this Flat to me during last year in June.
We got the Registry done and on the registry papers it was clearly mentioned that " the Vendors (Sellers) has all the rights to use all the facilities and amenities provided in the said flat (building complex) and no one else has any right , title and interest in the same except Vendors which is free from all sorts of encumbrances, charges, demands, liens, litigation, mortgages, attachment, prior agreement to sell, acquisition or requisition etc.The Vendors have also not been restrained from selling, transferring or mortgaging the same by way of any injunction of any court or authority and the vendors have got absolute right, title and interest to sell, transfer and mortgages the same in any manner whatsoever as the same is also not attached under any decree of the court or by any authority for recovery of any taxes or dues whatsoever."
In the Registry Papers it is also mention " That the Vendors (Seller) do hereby make convenient and declare that they have not done any such thing whereby the flat hereby sold and transferred be lost from the hands of the vendees (Purchaser) , if the vendees suffer any loss due to any act or omission committed by the vendors or on account of anything found contrary to the covenants and declaration made in this deed the vendees shall be entitled to realize all the cost, losses, investment alogwith interest from the person and property of the vendors"
Just for info, Mr.X was running his factory and it was Pvt.Ltd and his daughter (Ms.X) was one of the DIRECTOR in the company. After the death of Mr.X , his family winded up his business and sold out all assets including the Flat I purchased.
Now after one Year of my purchase of this flat, two guys from local Tehsil came and showed me the papers that my flat has been attach for auction to recover old dues of their pending Sales Tax (Year 2008 -2009). The Recovery letter was in Mr.X Company NAME. I said you should go to factory, and they said we are from TEHSIL and we have the recovery notice from DM (District Magistrate)to attach this flat. They told me that the Notice was sent to factory but as it was closed and nobody was there to receive or answer, so they now come to the residence of the factory owner with a attachment order.
I told them that I purchased this flat and has been registered in my name and in the registration papers above points has been clearly mentioned than how come they can attch my property. They said that, they can do this under section 34 (I have no idea about this) they have the right to attach and auction the property.
I spoke to the Old Landlords (Daughter of Mr.X - they now live in other state) and they said they will take care of this issue through their lawyer but now I am quite worried about the Flat (Property) I purchased.
Could you please advice me on if there any chances that.
1) DM can attach my property on such grounds and auction this for the recovery of Mr.X Company dues against Sales Tax for the year 2008-09 ??
2) Is there any law which can help me to get out of this situation ??
I would be highly obliged if you can give me some advice on this matter.
ajay sethi
(Expert) 11 January 2013
your cause of action is aginst the vendors . issue the legal notice to vendors to clear sales tax dues .contact a local lawyer .
if vendors fail to clear the dues then you have to take legal proceedings aginst them for recovery of maount paid by you for purchase of flat .
to sale tax authorties yourr stand should be that you are bonafide purchaser . that sum of RS___________has been paid to vendors by cheque . to recovery said amount from vendors . give their detailed address . you will have to challenge order of attachment
KETAN DESAI
(Querist) 11 January 2013
Thank you so much Mr.Sethi for your valuable advice.
I am based @ U.P and we are talking about Uttar Pradesh Law.
I have a question ...
1. Mr.X was running his factory (in well known Industrial area)and he sold out a part of this factory premises to other party when he was alive and after his death his legal Hiers sold the remaining part of that property to the same person. So in this case will Govt.authorities will attach my Flat first to recover the dues or they will first go & attach the factory premises & the factory Shed because the dues are against the company he was running.
2. As per the declaration signed by VENDORS on the Registered Deed, the VENDORS were free from all sorts of encumbrances, charges, demands, liens, litigation, mortgages, attachment, prior agreement to sell, acquisition or requisition etc.The Vendors have also not been restrained from selling, transferring or mortgaging the same by way of any injunction of any court or authority and the vendors have got absolute right, title and interest to sell, transfer and mortgages the same in any manner whatsoever as the same is also not attached under any decree of the court or by any authority for recovery of any taxes or dues whatsoever.
Only after this declaration from them we got the Flat REGISTERED and now this is my NAME. In this case how can a Govt.Authorities can attach my Flat which was sold & registered almost 08 Months back.
3. And if they can do it now then there are good possibilities that such Dues can arise in future too. In that case what precautions should I do to avoid such tensions. PLease help me in this matter.
4. Also please let me know, How can send the Legal Notice to the Vendors at this stage because I have no papers or notice in my hand nor TEHSIL People has put any seal or notice on the flat. So on what grounds I can send this legal notice to Vendors.
FYI for the moment Tehsil people (after discussing the matter on phone with Vendors) have given 15 days grace time to settle the issue.
I WAIT FOR YOUR EXPERT ADVICE ON ABOVE. THANK YOU WELL IN ADVANCE FOR ANSWERING.
ajay sethi
(Expert) 11 January 2013
wait for 15 days period to elapse . see whether vendors make payment . in the meantime you can request the tehsil people to forward you copy of attachment order .
once sales tax issue is resolved sell off the flat .
KETAN DESAI
(Querist) 11 January 2013
And I would like to inform you that THIS FACTORY IS NOT CLOSED. THE PERSON WHO BOUGHT THIS FACTORY IS RUNNING THE FACTORY NOW.
So in this case, what are possibilities that Govt.authorities can attach my Flat against the old Sales Tax Dues. Total DUES shown is Rs.500K.
Anirudh
(Expert) 11 January 2013
You can inform the authorities about the factory premises, so that they can try to approach the factory owner as well.
KETAN DESAI
(Querist) 11 January 2013
I spoke to the people came and they said it is closed and they have send the NOTICE their but no response so they came to the RESIDENCE.
And just now I got the information that they went to factory and have the same discussion with present owner.
Vendors told me about this on Phone.
Anirudh
(Expert) 11 January 2013
It is very nice to know that the authorities are understanding your predicament and trying to be co-operative.
Vendors also seem to be nice to you. In that case, probably, you may not need to rush in with the legal notice, as suggested by me earlier (that was on the understanding that the vendors have played trick with you!).
I sincerely wish that the problem should get resolved to your best of interests.
KETAN DESAI
(Querist) 11 January 2013
Thank you sooo much Mr.Anirudh for taking all your precious time to answer my Query. I have no words to express my thanks to you & Mr.Ajay Sethi. Both of you being so kind to me in answering my question. Thanks again from my heart !!
I cannot say about the authorities bcoz they came and I put them on phone to the Vendors and their Advocate. They exchanged their views and finally authorities agreed to offer 15 days grace time to VENDORS to settle the issue with the department. They went without giving any NOTICE to me. I am thankful to them as well as to almighty GOD for this kindness.
Moreover VENDORS also made several calls to them while authorities were sitting with me and also to their advocate. Later VENDORS tried to give me all assurance to settle this matter with department without putting me into any kind of problem. Again I can say that GOD has been kind and I wish, that his kindness will continue forever like this.
And here on this Forum, your experts advices are SANJIVANNI BUTTI for people like me who never had faced such legal issues before.
Thank you once again for all your advices. I will come back to you again if I need more of your guidance.
KETAN DESAI
(Querist) 11 January 2013
Just one last question (for today)...incase If I have file a legal case or to defend Sales Tax authorities than which Lawyer should I approach. Shall I go with Civil LAWYER, or any other specialized LAWYER you specify who deals with such matter.
prabhakar singh
(Expert) 11 January 2013
Visit the lawyer who practices VAT(sales tax)
laws.
KETAN DESAI
(Querist) 11 January 2013
thank you sir for your kind advice.
KETAN DESAI
(Querist) 13 January 2013
Dear All Respected Experts.
I would appreciate if you please clear some doubts on this issue -
1. I checked for the factory of Mr.X and this factory has been purchased by some other person and he is now running this factory in different name(but doing the same business) under new VAT registration.
This New Buyer has purchased this Factory, Machines and the Land more than 2000K.
And further the Legal Heirs (His Wife, His Daughter & his Son) - Directors in his company are still alive and are in good financial situation and have properties in other states & Fixed Deposits and Vehicle.
Moreover the balance sheet of his company (Financial Year 2012- 2013) is still not finalized & submitted. Their Chartered Accountants are working on this.
In this case where the factory is running and have good assets (land, machines & factory shed), what are the chances that Sales Tax authorities attach my Flat for the recovery.
2. Recovery letter from Govt.Authorities is addressed to Company Name and has been sent to their registered Address (Where the factory was situated). And this factory is still running there on the same address(though in different name), so in this case Sales Tax Authorities should first attach the factory & its other assets (Machines, Land, Factory Shed, Transport Vehicles etc etc)and if they can't recover the complete amount from factory then they should attach other property of the dealer. How can they leave Factory and jump on Residential flat for the recovery ??
3. This Residential flat is in my Name now and without giving any NOTICE to me , how can authorities attach this property for the recovery ??
4. If they go for AUCTION than also they need my Signatures for the Registration, without my consent how can authorities auction this property ??
5. I paid Court Fee and got this flat registered and at the time of Purchase the original title deed of this flat was not kept under any mortgage and was free from any court decree (as per the declaration signed by VENDORS in Court). In that case how can authorities can attach my Property for the recovery.??
6. Should I go and take STAY ORDER FROM COURT to stop / avoid such attaching of my Flat. Shall I get such STAY ORDER from Civil Court??
7.Section 46 of VAT RULES 2007 (U.P) indicates that - Recovery of tax from legal heir- Where a legal heir of a deceased person has not been heard in any assessment of tax, recovery of any amount due against a deceased person shall be made from his legal heir only after the legal heir has been served with a show cause notice. Legal Heirs are still alive and living in other states. So what are the chances of that they get the show cause notice before proceeding to attach my flat for the recovery ??
8. PLEASE GO THROUGH THE FOLLOWING RULES OF VAT 2007 ACT.
POINT No.9. Liability of firm,association of persons and Hindu undivided family -assessed and penalty imposed or any amount due under this Act and is payable by such firm or association or Hindu Undivided Family; and
(b) where such firm or association or Hindu Undivided Family has discontinued its business, -
(i) tax, including penalty payable under this Act by such firm or association or Hindu Undivided Family up to the date of such discontinuance may be assessed and determined as if no such discontinuance had taken place ; and
(ii) every person who was at the time of such discontinuance a partner of such firm or a member of such association or Hindu Undivided Family shall, notwithstanding such discontinuance, be liable jointly and severally for the payment of tax assessed and penalty imposed and payable by such firm or association or Hindu Undivided
Family whether such assessment is made or penalty is imposed prior to or after such discontinuance, and, subject to as aforesaid, the provisions of this Act shall apply as if every such person or partner were himself a dealer: Provided that where it is found that a change has occurred in the constitution of the firm or association, the firm or association as reconstituted as well as partners or members of the firm or association, as it existed before re-constitution, shall jointly and severally be liable to pay tax including penalty, if any, due from such firm or association for any period before its reconstitution.
(2) Where the ownership of the business of any dealer, liable to pay, tax is transferred, the transferor and transferee shall jointly and severally be liable to pay the tax including penalty, if any, payable in respect of such business till the time of such transfer, whether the assessment is made or the penalty is imposed prior to or after such transfer.
(3) Where a tax including penalty, if any, is recovered from a reconstituted firm or association under the proviso to sub-section (1) or from a transferee under sub-section (2), such firm or association or a transferee shall be entitled to recover the same from the person who was originally liable to pay the tax.
10. (1) Where a dealer dies, his executor, administrator or other legal representative shall be deemed to be the dealer for the purposes of this Act and the provisions of this Act shall apply to him in respect of the business of the said deceased dealer:
Provided that -
(a) in respect of any liability of the deceased, his executor, administrator or other legal representative shall be liable only to the extent of the assets of the deceased in his hand;
(b) any proceeding including the proceeding for recovery may be continued from the stage at which it was pending at the time of the death of the dealer.
Tax due from deceased person payable by his representatives
(2) The provisions of sub-section (1) shall mutatis mutandis apply to a dealer being a partnership firm, which may stand dissolved in consequence of the death of any partner.
UNDER THESE RULES, WHAT IS THE STANDING OF THE PROPERTY I PURCHASED FROM THE LEGAL HEIRS OF THE DEALER ??
Please advice and answer on above. Thank you in advance for taking out some time for dropping your experts comments.
R.K Nanda 
(Expert) 13 January 2013
contact local lawyer.
