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2018 (6) TMI 1064 - HC - VAT and Sales TaxValidity of Notice of Attachment - case of petitioner is that Section 25 of the A.P. VAT Act, 2005 can be invoked only for the recovery of tax due under a deferred payment scheme but not for recovery of interest due thereon - recovery of interest on loan - it is also the case of petitioner that the properties sought to be attached are already mortgaged with the 3rd respondent Bank, and hence, the Banks dues will have priority of treatment, in terms of Section 26E of the SARFAESI Act, 2002. Held that:- From Rule 24(5)(b) it is clear that whenever any default in payment of tax is committed, the order granting the facility of payment by installments would become infructuous. Once the order granting the facility of deferred payment of tax becomes infructuous, the amount that remains unpaid automatically gets restored to the status of a tax. As a consequence, Section 22(2) would come into play, imposing a liability upon the dealer to pay interest on the amount due at a rate statutorily fixed. It is of relevance to point out that the liability to pay interest arising under Section 22(2) is not merely on tax. The invocation of Section 25 of the Act for the recovery of interest on the amount remaining unpaid under a deferment scheme, as if it were an arrear of land revenue, is clearly borne out by the provision itself. The expression interest payable under the Act used in Section 25 has to be understood in the context of Section 22 (2), which makes every other amount, apart from tax and penalty, liable to bear interest - the liability to pay interest is fastened under Section 22 (2). Interest on amount of loan - section 25 of the A.P. Revenue Recovery Act, 1864 - Held that:- Amount due even under the contract of deferred payment of tax, is an amount due under the Act, since the very power to grant such a facility arises out of statutory prescription and not outside the purview of the Act. Hence the second contention cannot also be accepted. The property sought to be attached is mortgaged - Section 26E of the SARFAESI Act, 2002 - Held that:- To have an attachment on the property which is already under mortgage to the Bank is completely different from the priority that Section 26E of the Securitization Act talks about. There is no bar in law for any property to be mortgaged second time, subject to the concurrence of the first mortgagee. The second mortgagee will stand in queue next to the first mortgagee - there is no illegality in the impugned order of attachment. Petition dismissed.
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