Madras HC Quashes Tax Attachment Issued After Property Transfer: Orders Registrar to Register Sale Deed Without NOC [Read Order]
Section 43 of the VAT Act and Section 82 of the GST Act only apply when a dealer transfers property to defraud the tax department after tax dues have become definite and enforceable.
![Madras HC Quashes Tax Attachment Issued After Property Transfer: Orders Registrar to Register Sale Deed Without NOC [Read Order]](https://images.taxscan.in/h-upload/2026/02/23/2126813-madras-hc-quashes-tax-attachment-issuedjpg.webp "Madras HC Quashes Tax Attachment Issued After Property Transfer: Orders Registrar to Register Sale Deed Without NOC [Read Order]")
In a recent ruling, the Madurai Bench of the Madras High Court held that a tax attachment order passed after a property had already been transferred cannot affect subsequent bona fide purchasers and set aside the State Tax Officer’s communication and the Sub Registrar’s refusal slip, directing that the sale deed dated 25.02.2025 be registered without insisting on a No...
In a recent ruling, the Madurai Bench of the Madras High Court held that a tax attachment order passed after a property had already been transferred cannot affect subsequent bona fide purchasers and set aside the State Tax Officer’s communication and the Sub Registrar’s refusal slip, directing that the sale deed dated 25.02.2025 be registered without insisting on a No Objection Certificate.
The writ petitions were filed by Lambogreen Agro Pvt. Ltd and Kappidurai, challenging the refusal of the Sub Registrar to register a sale deed dated 25.02.2025. The refusal was based on a communication from the State Tax Office, citing tax dues of Cape Engineering Pvt. Ltd., where the original property owner had served as Director.
The petitioners argued that the property had already been transferred in 2018 to the Director’s daughter, and later sold in 2024 to Lambogreen Agro Pvt. Ltd, and at the time of purchase, there was no encumbrance or attachment on the property.
It was also said that under Section 37 of the VAT Act, directors’ personal liability arises only if the company is wound up, which was not the case here.
The respondent argued that under Section 43 of the VAT Act, transfers made to defeat revenue recovery could be treated as void, and the question of bona fide purchase should be decided in a civil court.
After hearing both sides, the bench of Justice Krishnan Ramasamy observed that the attachment order dated 21.01.2025 was passed after the property had already been transferred, and the company was still in existence, so directors’ personal liability did not apply. Unless statutory conditions are strictly satisfied, third-party property cannot be attached.
The Madras High Court accordingly quashed the tax officer’s communication and the Sub Registrar’s check slip, directing registration of the sale deed without insisting on a NoObjection Certificate.
Accordingly, both writ petitions were allowed.
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