Court rules in favor of writ-applicant, prioritizing secured creditors' rights over government dues.

The Court ruled in favor of the writ-applicant, declaring that the State could not claim the first charge over the property under Section 48 of the VAT Act. The Mamlatdar was directed to update the revenue records to reflect the sale certificate, affirming the precedence of secured creditors' rights over government dues under the SARFAESI Act. Both writ-applications were disposed of, with instructions for the mutation process to be completed within 15 days.

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Issues Involved:
1. Legality of the claim made by the respondents under Section 48 of the VAT Act in light of Section 26E of the SARFAESI Act.
2. Validity of the charge recorded in the revenue records in relation to the property in question.
3. Decision of the Mamlatdar, Vadodara (Rural) regarding mutation entry of the sale certificate.

Detailed Analysis:

1. Legality of the Claim under Section 48 of the VAT Act:
The writ-applicant challenged the legality of the respondents' claim under Section 48 of the VAT Act, asserting that it is ultra vires in light of Section 26E of the SARFAESI Act. The Court noted that the pivotal issue was no longer res-integra, referencing previous judgments in *Bank of India vs. State of Gujarat* and *Kalupur Commercial Co-operative Bank Ltd. vs. State of Gujarat*. The Court reiterated that "the first priority over the secured assets shall be of the Bank and not of the State Government by virtue of Section 48 of the VAT Act, 2003." This position was further fortified by the Supreme Court's ruling in *Punjab National Bank Vs. Union of India*, which emphasized that the secured creditor's debt takes precedence over government dues unless explicitly stated otherwise in the statute.

2. Validity of the Charge Recorded in Revenue Records:
The writ-applicant sought to quash the charge recorded in the revenue records under Section 48 of the VAT Act. The Court found that the property in question was a secured asset under the SARFAESI Act, and thus, the State could not claim preference for tax recovery. It was established that the bank had the first charge over the property, and the auction conducted by the bank was lawful. The Court cited the Supreme Court and various High Court rulings, including *Dena Bank vs Bhikhabhai Prabhu Dass Parikh* and *Central Bank of India Vs. Siriguppa Sugars & Chemicals Ltd.*, which supported the precedence of secured creditors over government dues.

3. Decision of the Mamlatdar Regarding Mutation Entry:
The Mamlatdar had declined to mutate the sale entry in the revenue records, citing the State Government's first charge over the property under the VAT Act. The Court quashed the decision of the Mamlatdar, stating that "the State cannot claim any first charge over the subject property by virtue of Section-48 of the GVAT Act, 2003." The Mamlatdar was directed to post and certify the mutation entry to record the Certificate of Sale dated 08.09.2021 for the land in question.

Conclusion:
The Court allowed the writ-application, declaring that the State could not claim first charge over the property under Section 48 of the VAT Act. The Mamlatdar was instructed to update the revenue records to reflect the sale certificate. The judgment reaffirmed the precedence of secured creditors' rights over government dues in the context of the SARFAESI Act. Both writ-applications were disposed of accordingly, with the Mamlatdar directed to complete the mutation process within 15 days.

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