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of <h1>Supreme Court: Securitisation Act does not create first charge on property, Bombay Sales Tax Act prevails.</h1> <h3>Viraat Ispat Limited and another Versus Assistant Commissioner of Sales Tax and others</h3> The Supreme Court held that the Securitisation Act does not create a first charge on immovable property, and state legislation like Section 38C of the ... - Issues involved: Impugned auction notice for sale of immovable property u/s Article 226 of the Constitution for recovery of dues. Interpretation of Securitisation Act u/s 13(4) & 13(6) and conflict with Bombay Sales Tax Act u/s 38C.Issue 1: Impugned auction notice for recovery of duesThe Petitioners challenged an auction notice issued by the Assistant Commissioner of Sales Tax for the sale of their immovable property to recover dues amounting to Rs. 1.22 Crores. The debt of the bank was assigned to an asset reconstruction company, and symbolic possession was taken before the auction notice was issued.Issue 2: Interpretation of Securitisation Act and conflict with Bombay Sales Tax ActThe Petitioners argued that under Securitisation Act, the property vests in the asset reconstruction company upon a measure being taken u/s 13(4), and the property can only be sold at the behest of the secured creditor. On the other hand, the Revenue contended that the Securitisation Act does not create a first charge on immovable property, and Section 38C of the Bombay Sales Tax Act creates a first charge on the property for sales tax dues.Judgment Summary:The Supreme Court held that the Securitisation Act does not create a first charge on immovable property, and state legislation like Section 38C of the Bombay Sales Tax Act creates a first charge that overrides the Securitisation Act. The statutory first charge under the Bombay Sales Tax Act takes precedence over any existing mortgage. The property was rightfully put up for sale by the Revenue to recover sales tax dues, as per the provisions of Section 38C. The judgment in Transcore was distinguished as it did not address the specific conflict between the Securitisation Act and state legislation creating a first charge. The Petition was dismissed, upholding the validity of the auction notice for the sale of the Petitioners' property.
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