Case Law Details
Axis Bank Limited Vs. State of Gujarat & 5 Others (Gujarat High Court)
It is the case of the bank that in accordance with the provisions of the SARFAESI Act, more particularly, Section-26E and also, in view of the two pronouncements of this High Court one in the case of Bank of India vs. State of Gujarat and others; and another in the case of Kalupur Commercial Co-operative Bank Ltd. vs. State of Gujarat, the bank will have the first precedence and the department cannot put forward its claim for the purpose of recovering the dues towards VAT.
What came to be purchased by the writ-applicant in the auction proceedings conducted by the Bank of Baroda was a secured asset under the provisions of the SARFAESI Act. In such circumstances, the State cannot claim preference over the subject property for the purpose of recovery of the dues towards tax. It is not in dispute that the first charge was created in favour of the bank and the bank in exercise of its powers under the SARFAESI Act, put the subject property to auction.
In view of the settled position of law, this writ-application succeeds and is hereby allowed. It is hereby declared that the State cannot claim any first charge over the subject property on the strength of Section-48 of the GVAT Act, 2003.
State Cannot Claim Preference over secured Assets for recovery of Tax Dues
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