Statutory first charge for sales tax dues overrides SICA protection, allowing recovery and attachment to proceed.

Section 16C of the Andhra Pradesh General Sales Tax Act, 1957 created a first charge in favour of the Government over the dealer's property, giving sales tax dues priority under the non obstante clause. Statutory recovery provisions for banks and secured creditors did not displace that priority. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was not an absolute bar to recovery of sales tax arrears, particularly where the BIFR reference had abated and no valid restoration order existed. The impugned attachment and recovery proceedings were therefore not barred.

---

---

Issues: Whether section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 barred the State from initiating recovery proceedings and attaching the petitioner's property for sales tax arrears under the revenue recovery law.

Analysis: Section 16C of the Andhra Pradesh General Sales Tax Act, 1957 created a first charge in favour of the Government over the dealer's property and operated with a non obstante clause. The Supreme Court authorities relied on by the Court recognised that such statutory first charge gives priority to sales tax dues and that recovery statutes for banks and secured creditors do not displace that priority. The Court also held that section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not impose an absolute embargo on recovery of sales tax arrears, especially where the BIFR reference had abated and there was no valid restoration order.

Conclusion: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar the impugned attachment and recovery proceedings, and the challenge failed.

---