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2019 (7) TMI 1340 - HC - VAT and Sales TaxValidity of proclamation of sale - recovery of arrears of sales tax - auction of property - mandatory “first charge” on the property of the dealer - HELD THAT:- What can be taken to be more than settled is that Section 16(b) of the Act creates a statutory first charge that prevails over any charge that may be in existence. Therefore, the charge thereby created in favour of the State in respect of the sales tax dues of the petitionerSociety prevailed over the charge created in favour of the KCC Bank in respect of the loan taken by the petitioner-Society. Admittedly, instructions are nonstatutory and will have to give way to the statutory provisions as contained in Section 16(b) of the Act. Since respondent No.4 by virtue of Section 16(b) of the Act has a statutory first charge in its favour, which prevails over any charge that may be in existence, therefore, at the first instance is entitled to the sale proceeds realized out of the sale amounting to ₹ 31,25,000/-lying deposited in the registry of this Court and only if further residuary amount is still left undisbursed, only then it would be respondent-KCC Bank, which shall be entitled to such residuary amount. Application disposed off.
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