2020 (1) TMI 1713 - HC - VAT / Sales Tax

Recovery of sales tax dues - lien on the property in favour of the State Government - HELD THAT - This Bench has resolved the issue as per the Judgment ASREC (INDIA) LIMITED A COMPANY VERSUS THE STATE OF MAHARASHTRA THE OFFICE OF THE SALES TAX AND THE OFFICIAL LIQUIDATOR OF THE HIGH COURT OF BOMBAY AS THE OFFICIAL LIQUIDATOR OF M/S. CRYSTAL MIRAGE PVT. LTD. 2019 (12) TMI 633 - BOMBAY HIGH COURT . It was held that the dues of a secured debtor rank above the dues of the State Government under the Maharashtra Sales Tax or a Value Added Tax. The Petition is disposed of quashing the letter dated 14.03.2018.

Summary

In the judgment from the Bombay High Court, the petitioner, a secured creditor, challenged a letter from the Deputy Commissioner of Sales Tax dated March 14, 2018, which claimed a lien on a property due to sales tax dues owed to the State Government. The court referenced its prior decision in Writ Petition 1039 of 2017, stating that "the dues of a secured debtor rank above the dues of the State Government under the Maharashtra Sales Tax or a Value Added Tax." Consequently, the court quashed the letter asserting the lien. The judgment further clarified that any surplus from the sale of the secured asset should be transmitted to the Sales Tax Department, State of Maharashtra, if available.