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TMI Blog2021 (8) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of same being in contravention of Section 22-A of the Act of 1908. The ground of encumbrance to refuse registration of a document is in relation to marketable title of the property. There is encumbrance of the Department of Sales Tax. The Registering Officer shall have to ascertain whether the requisite permission from the Competent Authority under the relevant enactment has been obtained and is required to annex the said permission, if it is prohibited. The Registering Officer will also have to ascertain whether the document presented for registration is contrary to any of the terms and conditions mentioned in the NOC granted by the Competent Authority. Undisputedly, in the present matter, the respondents have not shown any such statutory prohibition which enables the Registering Officer to refuse registration of the sale certificate. Thus, it is the duty of the respondent no. 5 to register the sale certificate issued in favour of the auction purchaser by the Authorized Officer under the provisions of the Rules of 2002. The respondent no. 7 is duty bound to take action against the defaulter for evading taxes and recovering its dues by attaching their movable properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/10/2020 issued by the respondent no. 5 (Registrar of Assurances, Class-I, Tah. Zarijamni, Dist. Yavatmal) by which the respondent no. 5 refused to register the aforesaid sale certificate in accordance with the provisions of the Registration Act, 1908 (for short the Act of 1908 ). The petitioner has therefore filed the present petition seeking various reliefs. During the course of hearing, learned advocate for the petitioner pressed for prayer clauses (f), (f-a) (f-b) only, which are referred to in paragraph no. 2 above. 5] This Court by the order dated 29/01/2021 issued notices to the respondents and directed the petitioner to add the Sales Tax Department as party respondent. In pursuance of the notice issued by this Court, the respondents have appeared and have filed their reply. The reply is filed by Tejrao Kisan Pacharne, Joint Commissioner of State Tax (Adm.), Amravati Division, Amravati. In the reply, it is stated that the Sales Tax Department has first charge over the dues of the secured creditor in view of Section 37 of the Maharashtra Value Added Tax Act (for short MVAT Act ). It is stated that the charge created under Section 37 read with Section 100 of the Transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the auction purchaser. She placed reliance on the un-reported judgment of this Court in W.P. No. 7971/2019 (Medineutrina Pvt. Ltd. vs. State of Maharashtra) dated 18/02/2021. 8] With the assistance of learned advocates for the respective parties, we have carefully scrutinized the petition, affidavit-in-reply, rejoinder along with its annexures and in particular the communication dated 19/10/2020 issued by the respondent no. 5 (Registrar of Assurances) refusing to register the sale certificate issued as per the provisions of the Rules of 2002. The Registrar of Assurances has refused to register the sale certificate on the following grounds :- (1) The document is not routed through proper source. (2) Demarcation of the area in the sale certificate is not done. (3) The area of construction is not stated. (4) The certified copy of 7/12 Extract is not annexed. (5) Proper description of machinery on site is not mentioned. (6) The stamp duty payable for sale certificate needs to be adjudicated under the provisions of the Stamp Act before registration. (7) There is encumbrance of the Department of Sales Tax. 9] Insofar as the Ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment incorporated in the State of Rajasthan was challenged before the High Court of Rajasthan. The High Court of Rajasthan held the said amendment to be unconstitutional and struck it down. The decision of High Court of Rajasthan holding the similar amendment as unconstitutional was affirmed by the Hon'ble Supreme Court in the case of State of Rajasthan vs. Basant Nahata reported in 2005 (12) SCC 77. It is pertinent to note that Section 22-A introduced by the Maharashtra Act No. 24 of 1938 came to be deleted by the Maharashtra Act No. 10 of 2012 which came into force on 25/05/2012. In clause (h) of Sub-Rule (1) of Rule 44 of the Rules of 1961, there was a provision made for giving effect to Section 22-A. It needs to be noted that by the notification dated 27/06/2006, Clause (i) was added to Sub-Rule (1) of Rule 44 of the Rules of 1961 covering a transaction which is prohibited by any existing Act of Central or State Government. 12] On careful reading of the last ground mentioned in the communication dated 19/10/2020, it appears that the respondent no. 5 has purportedly refused to register the sale certificate relying on Clause (i) of Sub-Rule (1) of Rule 44 of the Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion which is intended by the document, is prohibited by any existing act of Central or State Government, then the true copy of requisite permission or No Objection Certificate from the Competent Authority under the said act, has been attached along with the document, and that, the document is not written in contradiction with any vital term or condition mentioned in that permission or No Objection Certificate. 14] On plain reading of Clause (i), we are of the view that the respondent no. 5 could not have purportedly invoked Clause (i). Sub-Rule (1) of Rule 44 of the Rules of 1961 provides that before accepting any document for registration, the Registering Officer is concerned with its validity but he should ascertain the various factors set out in Clauses (a) to (i). Clause (i) of Rule 44 of the Rules of 1961 will apply only when the transaction is covered by the document which is prohibited by a Central or State Statute. There is encumbrance of the Department of Sales Tax. The Registering Officer shall have to ascertain whether the requisite permission from the Competent Authority under the relevant enactment has been obtained and is required to annex the said permission, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the Division Bench of this Court in the case of State Bank of India (supra), ASREC (India) Limited, Mumbai (supra) and Axis Bank Limited, Mumbai (supra). It is categorically held by this Court that if any Central Statute creates priority of a charge in favour of the secured creditor, the same will rank above the charge in favour of the State for a tax due under the Value Added Tax of the State. Therefore, it is not necessary to dilate on the said issue anymore. 18] Learned AGP placed reliance on the un-reported judgment of this Court in the case of Medineutrina Pvt. Ltd. (supra). This Court in the said case, inter alia held that the dues under Section 37(1) of the MVAT Act, being a statutory charge on the property, would also be recoverable by a sale of property and thus puts a liability upon the auction purchaser, who in case, wants an encumbrance free title, will have to clear such dues. In the facts of the present case, the petition is filed by the Bank seeking relief of registration of the sale certificate. Therefore, we are not making any adjudication on the issue of right of the respondent no. 7 to recover its dues from the auction purchaser. 19] For foregoing re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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