9911796707
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Issues:
- Petition for a writ of mandamus to prevent the sale of movable property due to tax arrears. - Validity of the attachment of movable properties by the tax authorities. - Priority of government dues over bank's hypothecation in case of default. Analysis: The case involves a petition seeking a writ of mandamus to halt the sale of movable property of a company due to tax arrears. The company had a cash credit facility with a bank, creating a charge over its stock-in-trade. The tax authorities attached the movable properties for non-payment of sales tax arrears, despite the bank's prior hypothecation. The petitioner argued that the tax authorities were not entitled to sell the goods as the bank had a first charge. However, the tax authorities contended that the company was in substantial arrears and had not complied with payment terms, leading to the attachment and sale notice. The key issue for consideration was whether the petitioner's claim for relief had merit. The court noted that the sale notice was issued in accordance with the Revenue Recovery Act. It was highlighted that the bank's hypothecation did not constitute a secured debt that could take precedence over government dues for tax arrears. The court emphasized that if the hypothecated goods were available for recovery of tax arrears, the government had the right to proceed with attachment and sale. After careful consideration of arguments from both sides, the court found no grounds to grant the relief sought in the writ petition. Consequently, the petition was dismissed, and no costs were awarded. The judgment upheld the validity of the tax authorities' actions in attaching and proceeding with the sale of movable property for recovery of tax arrears, despite the bank's prior charge over the goods.
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