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TMI Blog2024 (7) TMI 1309X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Sales Tax, Pune) would be free to take such steps as they deem fit against the Respondent No.6 for recovery of Sales Tax dues as per law. Petition allowed. - A.S. CHANDURKAR RAJESH S. PATIL, JJ For the Petitioner : Mr. Charles Desouza a/w. Mr. V. N. Ajikumar. For the Respondent - State : Mr. N. C. Walimbe, Addl. G.P. a/w. Smt. R. A. Salunkhe, AGP. JUDGMENT (PER : RAJESH S. PATIL) : 1. RULE. Rule is made returnable forthwith. 2. This writ petition is filed under Articles 226 and 227 of the Constitution of India, by Petitioner-Bank, challenging the Orders of Attachments dated 14/9/2022 and 15/9/2022 initiated by Respondent No. 2 (the Deputy Commissioner of Sales Tax, Pune). 3. The Petitioner is a bank who lended various credit facilities from time to time to Respondent no.6 (M/s. Anupama Enterprises). In order to secure the credit facilities granted by the Petitioner-Bank, the Respondent no.6 and its mortgagers created equitable mortgage in respect of three residential flats, situated at Pune (for short the secured assets ). 4. As the borrowers failed to maintain the loan account, the Petitioner-Bank declared the account of Respondent no.6 as NPA, on 28/2/2017. Subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sales tax for the period of 2010 - 2011 to 2015-2016 and a further arrears of sales tax during the period 2011-2012 to 2015-2016. The Respondent No. 2 (The Deputy Commissioner of Sales Tax) by its notice dated 12/8/2022 sought documents pertaining to two mortgaged properties. The Petitioner Bank by its letter dated 18/8/2022 replied to Respondent No. 2 (The Deputy Commissioner of Sales Tax) and informed that they have priority charge over the secured assets, being a secured creditor and in case of any residual amount, the same will be handed over to Respondent No. 2. 7. The Tahsildar, thereafter, took physical possession of the third secured assets on 25/8/2022. Accordingly, possession notice was issued by Petitioner bank under Section 13 (4) of the SARFAESI Act. The Petitioner Bank issued an E-auction notice dated 24/8/2022. Pursuant to the said E-auction, bids were received by the Petitioner Bank, and Respondent no. 3 was declared as a highest bidder and Sale Confirmation Letter dated 15/9/2022 was issued by an Auction Agency to Respondent no. 3, confirming acceptance of highest bid amount. 8. Thereafter, Respondent No. 2 (the Deputy Commissioner of Sales Tax), served attachme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions:- (i) Learned Additional Government Pleader submitted that the Sales Tax Department has claimed over the secured assets in form of arrears of Sales Tax and hence, they had a priority of claim. (ii) Learned Additional Government Pleader referred to the judgment of the Division Bench of this Court in Purushottam Prabhakar Chavan vs. CST 2024 SCC OnLine Bom 1235 passed in Writ Petition No. 3477 of 2024, decided on 3/5/2024. 15. We have heard counsel from both sides and we have also considered the documents on record. 16. The issue to be answered in the present matter is ; Whether the Respondent No. 2 (The Deputy Commissioner of Sales Tax) will have priority charge over the secured assets sold by Petitioner bank (secured creditor) under the SARFAESI Act. 17. The borrower or guarantor have not challenged the impugned orders of Attachment. 18. In the present proceedings, it is a matter of record that on 4/10/2022, the Petitioner bank registered the secured assets under the Central Registry of CERSAI. 19. There is no dispute that Respondent No. 2 (The Deputy Commissioner of Sales Tax) has registered its claim of arrears of sales tax with regard to Respondent no.6 (M/s. Anupama E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any confusion as to inter-se distribution of proceeds received from sale of properties of the borrower/dealer. If a secured asset has been disposed of by sale by taking recourse to the Security Interest (Enforcement) Rules, 2002 it would appear to be reasonable to hold, particularly having regard to the non-obstante clauses in sections 31 B and section 26E, that the dues of the secured creditor shall have priority over all other including all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority. 88. Bare perusal of the 2016 Amending Act would show that the dues of the Central/State Governments were in the specific contemplation of the Parliament while it amended the RDDB Act and the SARFAESI Act, both of which make specific reference to debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority and ordains that the dues of a secured creditor will have priority , i.e., take precedence. Significantly, the statute goes quite far and it is not only revenues, taxes, cesses and other rates payable to the State Government or any local authority but also those pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid in priority over all other debts and taxes. In the present proceedings it is Petitioner Bank who has registered its claim against the secured assets with CERSAI earlier i.e. 4/10/2022, in view of the law as laid down by the Full Bench of this Court, in Jalgaon Janta Sahakari Bank Ltd. (supra) and as per Section 26E of the SARFAESI Act, the Petitioner Bank (secured creditor) will have priority over the revenues and taxes of the State Government. 22. Hence, we are of the view that the present Writ Petition filed by Petitioner Bank (secured creditor) deserves to be allowed. 23. However, we hereby clarify that the Respondent No. 2 (the Deputy Commissioner of Sales Tax, Pune) would be free to take such steps as they deem fit against the Respondent No.6 for recovery of Sales Tax dues as per law. 24. The Writ Petition is allowed. Rule is made absolute in terms of prayer clauses (a), (b) and (c) which read as under:- (a) That this Hon ble Court be pleased to issue writ of certiorari or any other appropriate Writ, Order or Direction under Articles 226 and 277 of the Constitution of India calling for the records and proceedings initiated by Respondent No. 2 and quash and set aside the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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