Prior secured creditor charge prevails over later tax encumbrance, and SARFAESI sale title cannot be burdened by revenue entries.

A prior secured creditor's charge under the SARFAESI framework prevailed over a later sales tax and VAT-related charge created by revenue authorities. The Court applied the settled principle that statutory tax dues and consequential mutation entries cannot override an earlier secured interest or disturb title acquired through SARFAESI sale. On that basis, the subsequent attachment, encumbrance, and revenue entries were quashed, and the auction purchaser's title was held to remain free from the later State tax claim.

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Issues: Whether a subsequent charge and revenue mutation entry created by the sales tax authorities for tax dues could survive against a prior charge held by the secured creditor and the auction purchaser under the SARFAESI framework.

Analysis: The property had already been sold through proceedings under the Securitisation And Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002, and the bank's charge was prior in point of time. The Court applied the settled principle that, in the context of secured recovery under the SARFAESI Act and the Recovery of Debts and Bankruptcy Act, 1993, statutory tax dues cannot override the rights of a secured creditor where the subsequent State charge is inconsistent with the prior secured interest. On that basis, the later sales tax and VAT-related charge entries could not displace the purchaser's title or continue to burden the property.

Conclusion: The subsequent sales tax charge did not survive and the impugned attachment and consequential revenue entries were quashed.

Final Conclusion: The petitioner's title was held to prevail over the later State revenue charge, and the property was directed to be from the sales tax encumbrance.

Ratio Decidendi: A subsequent statutory charge for tax dues cannot prevail over a prior secured creditor's charge and sale under the SARFAESI regime, and consequential mutation entries based on such subordinate charge cannot be sustained.

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