Mortgage of secured creditor gets prior charge over charge for tax/VAT dues

State Bank of India Vs State of Maharashtra (Bombay High Court)

In our considered view the facts in the case at hand being similar to the facts in the case of ASREC (India) Limited (Supra) that decision would squarely be applicable to the facts of this case that if any Central statute creates priority of a charge in favour of a secured creditor, the same will rank above the charge in favour of a State for a tax due under the value added tax of the State. Therefore, in our view what becomes relevant

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