Prior registered secured interest prevails over later VAT charge; adverse revenue mutation entry must be deleted.

A prior registered security interest of a secured creditor prevails over a later-created State VAT charge on the same mortgaged property. Where the bank's mortgage and security interest were registered before the revenue charge, the later tax claim could not displace the secured creditor's rights under Section 26E of the SARFAESI Act. On that basis, the adverse revenue mutation entry reflecting the State's charge was liable to be removed, and the authorities were directed to delete it. The stated principle is that a subsequent statutory charge for tax dues does not override an earlier registered secured interest.

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Issues: Whether the petitioner bank's secured interest had priority over the State tax department's later-created charge on the mortgaged property, and whether the revenue mutation entry reflecting that charge was liable to be removed.

Analysis: The property had been mortgaged to the bank and the security interest had been registered before the State charge was entered in the revenue record. The later charge under the VAT law could not prevail over the prior secured interest in view of the settled position under Section 26E of the SARFAESI Act. The Court followed the earlier view that dues under the VAT regime do not have precedence over a secured creditor's rights where the bank's charge is prior in point of time.

Conclusion: The State's charge did not survive against the petitioner's prior secured interest, and the authorities were directed to remove the charge and delete the mutation entry.

Final Conclusion: The secured creditor's prior registered charge was held to prevail over the subsequently recorded VAT charge, entitling the petitioner to deletion of the adverse revenue entry.

Ratio Decidendi: A later statutory charge for tax dues cannot override a prior registered security interest of a secured creditor under Section 26E of the SARFAESI Act.

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