Case Law Details
Shailesh K Bothra Vs State of Maharashtra (Bombay High Court)
Bombay High Court held that after the recognition of the first charge of the assessee as a secured creditor, the charge of the Sales Tax Department to recover the sales tax dues would be valid.
Facts- This petition under Article 226 of the Constitution of India, quite peculiarly is filed by three petitioners. Petitioner nos. 1 and 2 are auction purchasers in an auction held by petitioner no. 3- a non-banking financial institution under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “SARFAESI Act”).
The question which falls for determination in the present proceedings is whether petitioner nos. 1 and 2 who are auction purchasers in a securitization auction held by petitioner no.3, are liable to discharge the sales tax dues, for the recovery of which, the property as purchased by them, was attached by the Sales Tax Department prior to the auction; and/or whether petitioner nos. 1 and 2 have purchased an encumbered property?
Conclusion- Held that this is a clear case in which the Sales Tax Department had a charge on the said property as purchased by petitioner Nos.1 and 2, in view of attachment order dated 11 August 2017, which has remained to be valid and subsisting. Further the position in law is also clear that after the recognition of the first charge of petitioner No.3 as a secured creditor, the charge of the Sales Tax Department to recover the sales tax dues would be valid and subsisting, which would empower the Sales Tax Department to enforce the same.
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