- (1.) The petitioner has filed the present writ petition for the quashing of the recovery certificate.
(2.) The facts leading to the filing of the writ petition is that respondent No.4, M/s American Paints Ltd., started a unit after applying for exemption under Section 4-A of the U.P. Trade Tax Act (hereinafter referred to as the "Act"), which was granted and the said unit was exempted from payment of Trade Tax upto 2007. The respondent No.4 ran into losses and recovery of trade tax dues was initiated against respondent No.4, pursuant to which the unit of respondent No.4 was attached by the trade tax authorities. The said respondent also took a loan from Pradeshiya Industrial & Investment Corporation of Uttar Pradesh Ltd. (hereinafter referred to as "PICUP"). The recovery proceedings were also initiated by the PICUP and on 25.1.2003, pursuant to a tacit understanding between the trade tax authorities with PICUP, the unit of respondent No.4 was attached under Section 29 of the State Financial Corporation Act. It is alleged that in these attachment proceedings the trade tax authorities and PICUP agreed that the proceeds of the auction would be disbursed in adequate proportions between the two departments. After the attachment, an advertisement was issued by PICUP inviting offers for sale of the assets of the unit. The petitioner made an offer of Rs.172.50 Lakhs, which was accepted and an agreement to sell was entered between the petitioner and PICUP.
(3.) In this agreement to sell, it was agreed, that the transfer of the assets would be free from all encumbrances and that the petitioner would not be liable for any statutory or tax liabilities in relation to the acquired assets. Subsequently, a sale-deed was executed and under Clause (b) thereof it was categorically stated that the property sold to the petitioner was free from all encumbrances, mortgages, interests, claims, liens etc. and that the vendor would indemnify and keep the petitioner harmless in the event of any adverse claim arising from any statutory or tax liability.;