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of <h1>Court allows state to appropriate funds for tax arrears under amnesty scheme, offers company chance to reverse sale.</h1> The Court allowed the State to appropriate the amount towards sales tax arrears under an AMNESTY Scheme, resolving a conflict with the Bank. The Company ... Recover of sales tax dues - Works Contract - AMNESTY Scheme to settle the liability of the defaulters of tax - purchase of property without any liability after fixing the amount - SARFAESI Act - Held that:- This Court is of the view that the present dilemma can be resolved, if the State is allowed to appropriate the amount towards the sales tax arrears by allowing the Company to settle the liability under the AMNESTY Scheme. It is to be noted that the Company had filed an application though belatedly for such relief. Therefore, treating that matter as settled under the AMNESTY Scheme, the amount due under the AMNESTY Scheme i.e., ₹ 37,11,210/- shall be released by the Bank in favour of Deputy Tahsildar (RR) within three days from today. The Company's request can be safeguarded in I.A.No.1068/2018 by allowing them to set aside the sale provided that the Company pays Rs.Four Crores and One Thousand along with 10% interest from the date of deposit by the auction purchaser till the Company clears the amount of the auction purchaser. However, it is made clear that it has to be done within three months from today. If the Company pays the amount within time, the sale would stand set aside. Petition disposed off. Issues:Challenge to SARFAESI notice and recovery certificate, dispute between State and Bank on appropriation of amount, appointment of Advocate Commissioner for property valuation and sale, auction purchase, AMNESTY Scheme for tax defaulters, conflict of claims by State and Bank, resolution of dilemma on appropriation of amount, Company's application to set aside sale, appropriation of expenses, consequences of failure to clear amount within specified time.Challenge to SARFAESI Notice and Recovery Certificate:The petitioners, employees and a works contractor of a company, challenged the SARFAESI notice and recovery certificate issued by the Debt Recovery Tribunal to recover dues to the Indian Overseas Bank. The petitioners sought permission to purchase the property without any liability after fixing the amount due. Revenue authorities were also impleaded in the writ petition.Appointment of Advocate Commissioner and Auction Purchase:An Advocate Commissioner was appointed by the Court to assess and sell the property due to a dispute between the State and the Bank regarding appropriation of the amount. The auction sale was conducted, and the 40th petitioner purchased the property for Rs. Four Crores and One Thousand as the highest bid.AMNESTY Scheme and Conflict of Claims:The Government had an AMNESTY Scheme for tax defaulters, and the Company applied to settle its liability under this scheme. The conflict arose between the State and the Bank regarding the appropriation of the amount due. The Court resolved the dilemma by allowing the State to appropriate the amount towards sales tax arrears under the AMNESTY Scheme.Company's Application to Set Aside Sale and Appropriation of Expenses:The Company applied to set aside the sale by offering to clear the entire liability within three months. The Court allowed this by directing the Company to pay the auction purchaser's amount with interest. The Bank was instructed to release the actual expenses incurred by the petitioners and appropriate the balance amount subject to any one-time settlement available.Consequences of Failure to Clear Amount:If the Company fails to clear the amount within the specified time, the sale will be confirmed in favor of the 40th petitioner by the Revenue Recovery Tahsildar. The Tahsildar is entitled to recover actual expenses incurred for initiating revenue recovery proceedings. The Bank must ensure timely release of expenses and issue the sale certificate if the Company does not set aside the sale within the allowed time.Conclusion:The writ petition was disposed of based on the submissions made by the parties. The Court's decision resolved the conflict of claims and provided a mechanism for the Company to settle its liabilities and set aside the sale if done within the specified time. No costs were awarded in this judgment.
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