Cotton Casuals India Private Limited & Ors. Vs State of West Bengal & Ors. (Calcutta High Court)
Calcutta High Court held that section 232 of the Kolkata Municipal Corporation Act makes the property tax dues as first charge on the property hence refusal to grant mutation on account of outstanding property tax fully justified.
Facts- The Petitioner has preferred the present writ petition seeking an order, inter alia, for quashing and/or setting aside the demands raised by the Respondent No. 3 towards outstanding property tax together with interest and penalty, as communicated vide four separate letters, all dated 18.11.2014; and for issuance of an appropriate direction upon the Respondents to effect the mutation of the four leasehold factory units, being Nos. A-201, A-202, A-301 and A-302, admeasuring in aggregate 45,208 sq. ft. together with six car parking spaces, situated at Paridhan Garment Park, 19 Canal South Road, Tangra, Kolkata – 700015, West Bengal, in the name of the Petitioners, upon payment of property tax from the date of purchase, i.e., 07.05.2022, without levy of any interest and/or penalty.
Conclusion- Held that when assets are sold on ‘as is where is basis’, the purchaser acquires them with full knowledge that they are being sold without any warranties, representations, or indemnities, and that the purchaser alone bears the responsibility of verifying the condition, liabilities, and encumbrances attached to the assets. Further Section 232 of the KMC Act makes the property tax dues as first charge on the property and hence make it an encumbrance attached to the property. Hence, the Petitioner is liable to make the payment towards the outstanding property tax dues for the pre-liquidation period also.
