2018 (1) TMI 1220

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....spondent. 2. The petitioner has filed this Writ Petition, praying for issuance of a Writ of Certiorarified Mandamus, to quash the proceedings of the second respondent, culminating in a notice of attachment of immovable property, dated 19.11.2012. 3. To test the correctness of the impugned notice, the following facts would be relevant:- i) The third respondent is registered with the Service Tax Commissionerate, and it is the service provider, who appears to have defaulted in payment of service tax. Consequently, proceedings have been initiated by the respondents 1 & 2 for recovery. However, the fact remains that, the second respondent has not been able to recover any monies from the third respondent, as it appears that, he is ....

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.... of security for a loan transaction availed with the HSBC Bank, who is a secured creditor. In such circumstances, the respondent/Department cannot have any precedence over the secured creditor. 6. It has been so held by the Hon'ble Full Bench of this Court, (in which, I was a party) in the case of Assistant Commissioner (CT) Anna Salai-III Assessment Circle Vs. The Indian Overseas Bank, in W.P.No.2675 of 2011 etc., dated 10.11.2016, wherein, the issue is with regard to the claim of the Sales Tax Department against a property, over which, the secured creditor had first charge. At this juncture, it would be useful to refer to the relevant portion of the decision of the Hon'ble Full Bench, which is extracted as hereunder:- ....

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....interest is created, shall have priority and shall be paid in priority over all other debts and Government dues including revenues, taxes, cesses and rates due to the Central Government, State Government or local authority. Explanation. - For the purposes of this section, it is hereby clarified that on or after the commencement of the Insolvency and Bankruptcy Code, 2016, in cases where insolvency or bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured creditors in payment of debt shall be subject to the provisions of that Code.'' 3.There is, thus, no doubt that the rights of a secured creditor to realise secured debts due and payable by sale of assets over which secu....