TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the communication issued during customs investigation could restrain a secured creditor from proceeding under the SARFAESI Act for recovery against mortgaged assets, and whether the secured creditor's remedy had priority over the customs authorities' claim.
Analysis: Section 142A of the Customs Act creates a first charge for customs dues, but expressly saves the operation of the SARFAESI Act. Section 35 of the SARFAESI Act gives that Act overriding effect over inconsistent laws. On a combined reading, the customs authorities could not interdict recovery steps taken by a secured creditor under the SARFAESI Act. The Court also followed the settled rule that, absent a statutory preference, a secured creditor's claim prevails over Crown debt. The earlier coordinate Bench view permitting the bank to proceed with sale under SARFAESI was accepted.
Conclusion: The impugned communication could not block the secured creditor's recovery action, and the petitioner was entitled to proceed under the SARFAESI Act.
Ratio Decidendi: Where the customs statute itself saves the SARFAESI Act, the customs department cannot defeat a secured creditor's enforcement rights by invoking first-charge principles, and the secured creditor may proceed notwithstanding the customs investigation or claim.
TaxTMI 
