TaxTMI 
TaxTMI 
2024 (8) TMI 1271
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....L JUDGMENT {PER A.S. CHANDURKAR, J.} 1. Rule. Rule made returnable forthwith and heard the learned counsel for the parties. 2. The petitioner - Bank of India, a creditor, made available financial assistance to M/s. Synoprene Polymers Pvt. Ltd. on various terms and conditions. The borrower executed a Deed of Equitable Mortgage by depositing of Title Deeds on 7th March 2007. It's account however was declared as a Non-Performing Asset (NPA) on 29th September 2010. Company Petition No. 119 of 2013 came to be filed against it seeking its liquidation. By order dated 25th August 2014 passed in the said proceedings, some of the mortgaged properties were permitted to be sold by the creditor in association with the respondent no. 3-Officia....
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....(Writ Petition No. 2935 of 2018 decided on 30th August 2022) along with connected matters, it was submitted that unless the Sales Tax Department was in a position to show that it had taken appropriate steps for attaching the secured assets by following the procedure prescribed under the Maharashtra Land Revenue Code, 1966 ("Code"), it had no right to prevent the creditor from selling the secured assets. The Sales Tax Department did not place on record any material whatsoever to indicate that after following such procedure as prescribed by the Maharashtra Realisation of Land Revenue Rules, 1967 ("1967 Rules"), there would be a legal impediment for the creditor to sell the secured assets. It was then submitted that during pendency of the pres....
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....on dated 7th September 2013 came to be issued by the Assistant Commissioner of Sales Tax to the Talathi, Asangaon, Taluka Shahapur, District Thane in which it was stated that the Sales Tax Department had initiated proceedings for recovery of its arrears. The Sales Tax Department intended to attach the properties of the borrower after the liability in that regard was fixed. Hence, it was directed that without obtaining the No Objection Certificate of the Sales Tax Department, no transaction seeking to transfer title be accepted. It was submitted that besides aforesaid communication, the Sales Tax Department also addressed communications to the Tahsildar as well as the Official Liquidator in that regard. Reference was made to the provisions o....
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....he borrower, the Sales Tax Department seeks to rely upon the communication dated 7th September 2013 that was issued by it to the Talathi not to record any sale transaction in the Revenue Records on account of steps being taken by it for recovering its dues. This very issue based on the provisions of Section 26E of the SARFAESI Act as well as Section 38 of the Act of 2002 was the subject matter of consideration before the Full Bench of this Court in Jalgaon Janta Sahakari Bank Ltd. and Anr. (supra). After considering the provisions of the Code as well as the Rules of 1967 along with other relevant provisions, it was held in paragraphs 153 and 154 as under :- 153. In these proceedings we are as much concerned with proclamation itself as muc....
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....tion 31B, as the case may be, has been enforced, the dues of the secured creditor surely would have 'priority'. In other words, if the immovable property of the defaulter is shown to have been attached in accordance with law prior to Chapter IV-A of the SARFAESI Act, or for that matter Section 31B of the RDDB Act, being enforced, and such attachment is followed by a proclamation according to law, the 'priority' accorded by Section 26E of the former and Section 31B of the latter would not get attracted. 6. In the light of the aforesaid law it would be necessary to consider as to whether the Sales Tax Department has undertaken the attachment of the secured assets in the manner prescribed by the Code and the Rules of 1967. In the affidavit-i....
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....e to Banks and Financial Institutions Act, 1993 was enforced, the Sales Tax Department would not have priority over the dues of the secured creditor. In absence of any valid order of attachment as well as a proclamation in that regard, the Sales Tax Department cannot claim precedence over the dues of the secured creditors in view of Section 26E of the Securitization Act. Mere issuance of communication to the Talathi not to permit sale of a secured assets would be of no consequence as the law requires passing of a valid order of attachment and issuance of a proclamation in accordance with the Rules of 1967 to claim priority. We therefore find that the communication dated 7th September 2013 issued by the Sales Tax Department to the Talathi wo....