Leo Edibles & Fats Ltd. Vs. The Tax Recovery Officer (Central) IT Dept. (WRIT PETITION No.8560 OF 2018) - Synopsis
Team SoOLEGAL 14 Dec 2020

In this case Leo Edibles & Fats Ltd. Vs. The Tax Recovery Officer (Central) IT Dept. (WRIT PETITION No.8560 OF 2018), a writ petition had been filed in Hyderabad High Court by the petitioner against the order of Sub-Registrar, Erragadda, Hyderabad. In that order, it had refused to register its purchase of immovable property in the liquidation proceedings of VNR Infrastructures Limited, the Corporate Debtor in this particular case, on the ground that the Income Tax Department claimed to charge such immovable property on the basis of an earlier notice of attachment for non-payment of tax by the corporate debtor. A liquidation order has been passed by National Company Law Tribunal, Hyderabad against VNR Infrastructures Limited and according to that order the liquidator had created a liquidation estate. Subsequently, VNR's assets were sold via an electronic auction, in which the petitioner has deemed the highest bidder for one of the properties. The petitioner had deposited 25% of the gross amount due as payment and also received a letter of sale by the liquidator directing him for the remainder of the sale consideration to be deposited within 15 days. The petitioner came to know that the property which he had purchased was subjected to the attachment by the IT department. Thus for this reason a writ petition had been filed in Hyderabad High Court by the petitioner.
The Court held that that the petitioner firm should pay the balance of sale consideration in respect of the auction, but the liquidator was ordered not to pay any of the sums pending further orders. The High Court ordered the sub-registrar to register the sale of the property for the benefit of the petitioner and directed the IT Department to apply its claim to the liquidator, who might accept it in compliance with the priorities set out in Section 53 of the Code. 

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