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2022 (5) TMI 5 - HC - VAT and Sales TaxRecovery of arrears of VAT - priority of charge over the land - right of secured creditors - Registration of deed of conveyance - mutation of entry in registered sale deed - HELD THAT:- It appears that although the Sub-Registrar has registered the sale deed yet the sale deed has not been released on account of the claim of the State over the subject land. What came to be purchased by the writ applicant in the auction proceedings conducted by the Bank of Baroda was a secured asset under the provisions of the SARFAESI Act. In such circumstances, the State cannot claim preference over the subject property for the purpose of recovery of the dues towards VAT. It is not in dispute that the first charge was created in favour of the Bank of Baroda and the Bank in exercise of its powers under the SARFAESI Act, was entitled to auction the subject land and recover the requisite amount towards the dues incurred by the Company. The pivotal issue raised in the present writ-application is no longer res-integra in view of the decision in BANK OF INDIA VERSUS STATE OF GUJARAT & 3 OTHER (S) [2020 (1) TMI 1197 - GUJARAT HIGH COURT] and KALUPUR COMMERCIAL CO-OPERATIVE BANK LTD. VERSUS STATE OF GUJARAT [2019 (9) TMI 1018 - GUJARAT HIGH COURT] where it was held that We have no hesitation in coming to the conclusion that the first priority over the secured assets shall be of the Bank and not of the State Government by virtue of Section 48 of the VAT Act, 2003. It is hereby declared that the State cannot claim any first charge over the subject land by virtue of Section 48 of the GVAT Act, 2003. The impugned order passed by the Sales Tax Authority, Annexure H as well as the entry No. 15774 mutated in the revenue records with respect to the subject land is hereby quashed and set aside - Application disposed off.
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