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2021 (1) TMI 750 - HC - VAT and Sales TaxRecovery of VAT from the purchaser of property in Auction - Attachment of mortgaged properties - first charge of the Bank over the properties mortgaged with the Petitioners - recovery of sales tax dues from the assets of the defaulter by State Government - SARFAESI Act - HELD THAT:- The issue raised in this writ application is no longer res integra in view of the judgement of this Court in the case of Kalupur Commercial Cooperative Bank Limited vs. State of Gujarat [2019 (9) TMI 1018 - GUJARAT HIGH COURT]. It is now well settled that in view of Section 26E of the SARFAESI Act, 2002, the State cannot claim any first priority or precedence over the property in question on the strength of Section 48 of the Gujarat Value Added Tax Act, 2003. The security interest over the property was created in favour of the Bank much before the dues of M/s. Krishna Industries came to be determined under the VAT Act. It is hereby declared that the respondent No.2 had the first charge over the property mortgaged by M/s. Krisha Industries by virtue of Section 26E of the SARFAESI Act, and in such circumstances, they were entitled in law to put the property to auction. The writ applicants, being the auction purchasers, have a right to get their names mutated in the record of rights as the true and lawful owners of the property. In such circumstances, the Sub-Registrar of the Bhavnagar district is directed to register the document of sale deed executed between the Bank and the writ applicants. Once the sale deed is registered, it shall be open for the writ applicants to thereafter get their names mutated in the record of right - Application allowed.
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