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2023 (2) TMI 61 - HC - VAT and Sales TaxRecovery of dues - Priority of charge - creation of charge on the property - Seeking extraordinary jurisdiction to delete the charge created under Gujarat Value Added Tax Act for the property owned by the petitioner as per the private treaty under the provisions of the SARFAESI Act - SARFAESI Act have an overriding effect over the provisions of the VAT Act and the secured creditors shall have priority over the dues of Central Excise Department or not. Whether the charge created under the Gujarat Value Added Tax over the property in question would have an overriding power over the charge created under the provisions of the SARFAESI Act and the Security Interest Rules, 2002? HELD THAT:- The answer shall need to be in negation. It is quite clear from the provisions contained in SARFAESI Act that this Act would have an overriding effect over the provisions of the Gujarat Value Added Tax Act. The law on the subject requires consideration. Firstly, this Court in the case of KALUPUR COMMERCIAL CO-OPERATIVE BANK LTD. VERSUS STATE OF GUJARAT [2019 (9) TMI 1018 - GUJARAT HIGH COURT] held that the plain reading of section 48 of the VAT Act indicates that it starts with nonobstante clause and this provision creates first charge on the property. The issue as regards the claim of the property of the secured creditors vis-a-vis the first charge of the property under the State legislation was considered by the Apex Court in the case of CENTRAL BANK OF INDIA VERSUS STATE OF KERALA AND OTHERS [2009 (2) TMI 451 - SUPREME COURT], where the apex Court had held that if the State acts to create the first charge on the property, then the secured creditors cannot have the claim against the statutory provision. While so holding, it took into consideration section 100 of the Transfer of Property Act, 1882. The Court held that when two or more laws or provisions operate in the same field and each contains nonobstante clause stating that its provision will override those of any other provisions of the law stimulating an intricate problem of the interpretation arises while relying on such problems of interpretation, no settled principles can be applied, except to refer to the object and purpose of each of the provisions containing non obstante clause. Two provisions in the same Act, each containing a non obstante clause requires harmonious interpretation of the two seemingly conflicting provisions of the same Act. The conflict here is with the State Act and the Central Act. On considering the true purport and effect of section 26A of the SARFAESI Act, which came to be enacted later in point of time and also the effect of section 31B of the RDB Act, the Court considered in detail necessity for introduction of these two provisions in two enactments. The petition stands allowed deleting and removing noting of all the charges and encumbrance created under the Act on land located at Revenue Survey No.277, Village: Kamod, Taluka: Vatva, District: Ahmedabad with consequential relief.
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