TaxTMI 
TaxTMI 
2006 (7) TMI 643
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....e with the appellant-bank. The second respondent was sanctioned the cash credit facility to a sum of Rs. 100 lakhs on September 9, 1997 by The Nedungadi Bank. The second respondent, represented by its directors, had executed a promissory note for Rs. 1,00,00,000 on September 25, 1997, promising to repay the loan amount together with interest at the rate of 10.75 per cent over the bank rate with quarterly interest. The second respondent deposited the title deeds with the bank on September 29, 1997 in respect of the properties comprised in R. S. Nos. 271/2, 271/2B and C, 272, 273/9, 274/1, 274/2, 275/ 2, 266/2B, 267, 270/2, 265/5 and 270/1, Andipatti Taluk, Shanmugasundaram Village consisting of land and building thereon totally measuring 16....
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....9 . . . Rs. 59,453 1999-2000 . . . Rs. 39,530 2000-01 . . . Rs. 18,619 Total 1,08,39,558. The second respondent has not paid the abovesaid arrears and for the tax due, a sale notice was issued on November 26, 2004 by the first respondent in Na.Ka. 2460 of 2000. A3 for recovery of arrears of Rs. 1,08,39,558 Challenging the issuance of sale notice by the first respondent, the appellant-bank filed W.P. No.4893 of 2004 for the issuance of a writ of certiorarified mandamus to call for the entire records of the first respondent in Na.Ka.2460 of 2003.A3, quash the notice dated November 26, 2004 made therein and direct the first respondent or his servants or his subordinates or anybody claiming through the first respondent to forbear from ....
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....2) reads as follows: "24. (2) Any tax assessed on or has become payable by, or any other amount due under this Act from a dealer or person and any fee due from him under this Act, shall, subject to the claim of the Government in respect of land revenue and the claim of the land development bank in regard to the property mortgaged to it under section 28(2) of the Tamil Nadu Co-operative Land Development Banks Act, 1934 (Tamil Nadu Act 10 of 1934), have priority over all other claims against the property of the said dealer or person and the same may without prejudice to any other mode of collection be recovered: (a) as land revenue; or (b) on application to any magistrate, by such magistrate as if it were a fine imposed by him: Provi....
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....in respect of sales tax due over the debts of the secured creditor created by the company. The learned counsel for the first respondent would also rely upon the decision in State Bank of Bikaner & Jaipur v. National Iron & Steel Rolling Corporation [1995] 96 STC 612 (SC); [1995] 2 SCC 19, wherein it was held that the statutory first charge has precedence over an existing mortgage. In the abovesaid case, the State Bank of Bikaner and Jaipur had given cash credit facilities to the respondents. As a security for repayment of the amounts advanced to the respondents by the appellant-bank, the first respondent created a mortgage of the property. In that case, the appellantbank filed a civil suit in O.S. No. 5 of 1986 in the court of the Addition....
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....Act, any amount which an assessee is required to pay to the assessing authority or for which he is personally liable to the assessing authority, if it remains unpaid, be a charge on the properties of the assessee. It is clear from the provisions of section 24(2) of the Act, that any tax assessed on or which has become payable under the Act, have priority over all other claims, against the property of the dealer. So, it is evident from the said sections that the claim of the tax department will have priority over other debts. The appellant took shelter under G.O. Ms. No. 1394, dated December 4, 1990 and claimed that the bank has got priority over the dues to the Commercial Tax Department. In the said G. O., the fourth point would show that ....
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....decision of the honourable Supreme Court was considered and this court has held that the Sales Tax Department has got priority over the amounts due to it. A similar case arose under Kerala General Sales Tax Act, 1963 and the same was Delhi Auto and General Finance Pvt. Ltd. v. Tax Recovery Officer [1999] 114 STC 273 (SC); [1998] 8 SCC 705. Section 23 of the Kerala General Sales Tax Act is similar to section 24 of the Tamil Nadu General Sales Tax Act and interpreting the same, their Lordships said thus: (page 275) ". . . it is idle to contend that the appellant has a priority for payment of the amount due to him over the sales tax amount due to the State from the borrower under the Kerala General Sales Tax Act." The appellant-l....