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TMI Blog2024 (11) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... RAT HIGH COURT] wherein the question as to whether the auction purchaser would be liable to discharge the dues of the sales tax department is no more res integra. This Court in the aforesaid decision has held ' the charge in respect of the property in question created for sales tax dues or VAT dues is of no avail and has no efficacy in law in view of the provisions of SARFAESI Act and the RDB Act. The property in question was sold by respondent no.6-Bank under the provisions of SARFAESI Act and the petitioners were successful purchasers and the sale certificate is issued and sale deed is also executed by which the petitioners have become absolute owners of the property and therefore considering the existing position of law, the charge c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situated at Industrial Land bearing Survey No. 178/P/4 admeasuring 26404 sq.mtrs with allied construction thereon at Village:-Sanosara, Taluka-Sihor, District-Bhavnagar was invalid and illegal on the ground that the petitioner is a successful auction purchaser of the property in public auction held by the secured creditor. 3. Brief facts of the case are as under: 3.1 The original borrower one Shri Mahakali Cotton Pvt. Limited was the absolute owner and occupier of the property in question. The said borrower availed the credit facility from the Corporation Bank and created mortgage and charge on 14.11.2011 in favour of the Bank. However, the borrower could not re-pay the amount of loan availed and committed the default in discharging its lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Parv Shah for the petitioner submitted that in view of the decision of this Court in case of Partners Of Siddheshwar Tax Fab Ors. Versus State Of Gujarat Ors rendered in Special Civil Application No. 2527/2023 on 26.07.2024 , the charge created by the respondent-Sales Tax Department on the property is required to be removed as the petitioner is a successful auction purchaser. 5. On the other hand, learned AGP Mr. Raj Tanna for the respondent could not controvert the above submission that the respondent-Sales Tax Department cannot continue the charge over the property in view of the sale of the property under the provisions of the Recovery of Debts and Bankruptcy Act,1993 [ RDB Act for short] for recovery of the dues of the secured credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned AGP that the decision of the Rainbow Papers Ltd. (Supra) was considered in review, which is disposed of by the Apex Court as per para 26 and 27 extracted herein above. In such circumstances, we are of the opinion that the subsequent decision of the Hon ble Apex Court, in case of Rainbow Papers Ltd. (Supra) would not be applicable with regard to the applicability of provision of Section 26E of the SARFAESI Act as well as provisions of Section 31B of RDB Act vis-a-vis Section 48 of the vat Act as analysed and discussed by this Court in Kalupur Commercial Cooperative Bank (Supra). 38. In view of the above analysis and facts, we would also like to refer to the subsequent decision of the Coordinate Bench in case of Odhavji Mohanbhai Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the sale certificate is issued and sale deed is also executed by which the petitioners have become absolute owners of the property and therefore considering the existing position of law, the charge created by the respondent State over the property in question in the year 2018, cannot be sustained and is accordingly quashed and set aside and as a consequence the mutation entries in revenue records also stands deleted. The petition accordingly succeeds in the aforesaid terms. Rule is made absolute to the aforesaid extent. No order as to costs. 7. In view of the above, so far as the petitioner is concerned, the respondent authorities are directed to remove the charge in respect of the property in question created for sales tax dues in view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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