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2024 (3) TMI 1307 - HC - Income TaxSeeking directions to remove the order of attachment over the property of the borrower, which according to the petitioner, is mortgaged and is a secured asset - petitioner is a creditor of respondents 2 and 3 and account of the borrowers was declared as a non-performing asset and notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was issued HELD THAT:- It is not a matter of debate that the petitioner being a secured creditor and the security being registered with CERSAI would have a priority charge u/s 26E of the Act of 2002. A Full Bench of this court in the case of Assistant Commissioner (CT) Anna Salai-III Assessment Circle vs Indian Overseas Bank and Another 2016 (12) TMI 373 - MADRAS HIGH COURT] answered the reference and held that the rights of the secured creditors to realise secured debts due and payable to them by sale of assets over which security interest is created, shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or Local Authority. The Full Bench of the Bombay High Court in the case of Jalgaon Janta Sahakari Bank Ltd. and another vs Joint Commissioner of Sales Tax and another [2022 (9) TMI 163 - BOMBAY HIGH COURT] held that the secured creditor would have the priority charge, as contemplated under Section 26E of the SARFAESI Act, 2002, in case the same is registered under Section 26B of the SARFAESI Act, 2002. The secured creditor in this petition claims that its security is registered under Section 26B of the SARFAESI Act, 2002. In view of the Full Bench judgments, as referred to above, it is held that the secured creditor has priority charge over the claims of the Sales Tax, Commercial Tax and Income Tax. In case auction is held by the secured creditor and the sale certificate is not registered, then the Registering Authority may register the same, notwithstanding the attachment of Sales Tax, Income Tax or Commercial Tax Departments. In case the auction sale is conducted by the secured creditor and it has received excess amount than its dues, then it is liable to remit the excess amount to the Departments. However, if it has not received the amount in excess of the amount due and payable to it, then it is not required to remit any amount to the Departments and the Departments cannot sustain prosecution against the Authorised Officer or the Officer of the secured creditor for not remitting the amount.
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