Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2021 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 89 - HC - VAT and Sales TaxPreferential charge - Recovery of sales tax - Default in repayment of credit facilities - account was classified as Non-Performing Assets (NPA) - Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - HELD THAT:- Overlapping between the provisions of the DRT Act and Securitisation Act on one hand and Section 38 C of the Bombay Sales Tax Act and Section 26 B of the Kerala General Sales Tax Act and the Non-obstante clauses contained in Section 34(1) of the DRT Act and Section 35 of the Securitisation Act cannot be invoked for declaring that the first charge created under the State legislation would not operate qua the proceedings initiated by Banks, Financial Institutions and other secured creditors for recovery of their dues or enforcement of security interest. The Central Government amended SARFAESI Act, 2002 by introducing Chapter IV A by Amending Act, 44 of 2016 dated 01.01.2016 and the Central Government introduced the concept of registration by secured creditors and other creditors. In case of KALUPUR COMMERCIAL CO-OPERATIVE BANK LTD. VERSUS STATE OF GUJARAT [2019 (9) TMI 1018 - GUJARAT HIGH COURT] the issue was with regard to the first priority of the Bank over the dues vis-à-vis the sales tax dues which the State Government intended to recover from the assets of the defaulter. This Court examined this and to hold it in favour of the Bank that it would have the first charge over the properties mortgaged by virtue of Section 26 E. In the present case, the petitioner Bank had already registered all the mortgaged documents in the Central Registry as per Section 20 of the SARFAESI Act, 2002 and by virtue of provision of Section 26 E it is rightly held that the Bank being a secured creditor after registration of the security interest would enjoy priority over all other debts and all revenues, taxes, cesses and other rates. The petitioner appears to have registered all the mortgaged documents with the Central Registry as per the procedure prescribed under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Rules, 2011 - petitioner-Bank not only had registered the charge over the property in question, but it had also issued a public notice and deployed the security for protecting the property. The present petition succeeds and is hereby allowed.
|