Bank's Secured Mortgage Prevails Over Tax Arrears: Section 26E and Section 34 Establish Priority of Creditor Claims

HC determined priority of claims between secured creditor bank and Commercial Taxes Department. The court held that Section 26E of SARFAESI Act and Section 34 of RDB Act prevail over Section 24 of TNGST Act. The bank's equitable mortgage created in 1991 takes precedence over sales tax arrears. The court quashed the impugned notices, finding the bank's security interest legitimate and prioritized over government revenue claims, thereby allowing the writ petitions in the interest of public policy and legal consistency. .....

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