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of <h1>Gujarat High Court prioritizes bank over state in property attachment case</h1> <h3>Arvindkumar Shivlal Soni Versus The Commercial Tax Officer (4), Ahmedabad</h3> Arvindkumar Shivlal Soni Versus The Commercial Tax Officer (4), Ahmedabad - TMI Issues:1. Dispute over attachment of subject property under Gujarat VAT Act.2. Priority of recovery rights between Bank and State Government.3. Validity of entry No.16521 in record of rights.4. Legal remedy sought by writ applicants.Issue 1: Dispute over attachment of subject property under Gujarat VAT ActThe writ applicants sought relief to produce the original order for attachment of the subject property, quash the impugned order of attachment, and remove the entry showing attachment under the Gujarat VAT Act. The property was initially sold to the writ applicants by Bank of India through a public auction under the SARFAESI Act. Subsequently, an entry showing attachment by the State Government under the Gujarat VAT Act was discovered, leading to the grievance that this entry should be deleted as the property was a secured asset of the bank.Issue 2: Priority of recovery rights between Bank and State GovernmentThe High Court analyzed the priority of recovery rights between the Bank and the State Government. Referring to previous judgments, the Court emphasized that the first priority over secured assets lies with the Bank under the SARFAESI Act, not the State Government under the VAT Act. The Court highlighted that the Bank had the first charge over the property, and any excess amount from the sale could be adjusted towards State dues. The judgment clarified that the State cannot proceed against purchasers of properties sold under the SARFAESI Act.Issue 3: Validity of entry No.16521 in record of rightsThe Court directed the concerned authorities to delete entry No.16521 showing attachment in the village form, emphasizing that the property was a secured asset of the Bank and the State Government cannot claim preference for recovery of dues. The judgment underscored that the Bank's charge over the property was established through legal auction proceedings, and the State's attachment entry was deemed invalid in light of the SARFAESI Act provisions.Issue 4: Legal remedy sought by writ applicantsThe writ applicants were granted the relief sought, with the Court ordering the deletion of the contested entry from the record of rights. The respondents were directed to take necessary actions based on the Court's order. Additionally, the judgment allowed the concerned authority to pursue legal steps available in law for recovering dues from the previous owner, ensuring that the Bank's priority in recovering its dues from the property was upheld.This detailed analysis of the judgment from the Gujarat High Court in the specified case provides insights into the legal interpretation and resolution of the issues raised by the parties involved.
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