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2022 (4) TMI 2 - KARNATAKA HIGH COURTRestraint from selling or alienating the property - Priories of secured creditors over State against tax dues - Seeking to remove the entries relating to the attachment order to enable the petitioner to transfer the Katha with respect to the schedule property - HELD THAT:- The admitted facts being that the proceedings under the SARFAESI Act were earlier in point of time. The decision was taken on 15.06.2018 as per the Possession Notice at Annexure-'Q'. The proceedings by the State were subsequent in point of time and recovery notice by the Department was issued on 01.08.2018 and the attachment order was passed thereafter on 10.08.2018. The respondent bank lodged its creation of security before the Central Registry of Securitisation Asset Reconstruction and Security Interest of India as is evidenced from the search result at Annexure-'AB' and 'AC' with respect to the properties which is the subject matter of present petition. The search result indicates the date of search as 31.07.2018 which would imply that lodging of creation of interest as regards the property by the bank was prior to 31.07.2018 while the recovery notice by the State was only subsequent to 01.08.2018 and the attachment order was on 10.08.2018. In the present case, it is clear that the charge that would have a priority is that of the bank as it is prior in point of time and also in light of Section 26E of the SARFAESI Act - It must be noted that as on date, the State not having enforced its attachment under the provisions of KVAT Act, Section 26E would be applicable and accordingly, the rights of secured creditors would rank higher and would over-ride the charge of the State that has been created subsequently. The petition stands disposed off.
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