TaxTMI 
TaxTMI 
2017 (10) TMI 1346
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.... for the period 2011-12 to 2013-14 and AG Audit objections for the years 2010-11 and 2011-12 under Section 26 of A.P. VAT Act, 2005 as illegal and arbitrary and consequently, to set aside the letter vide reference No. A7/119/2014, dated 04.04.2017 of respondent No.1 and Gazette Notification No. EG No. 190/2016, dated 06.12.2016 got published by respondent No.2. Heard the learned counsel for the parties and perused the record. The petitioner pleaded that the Andhra Bank, Rayavaram Branch, East Godavari District has sanctioned OCC loan facilities to an extent of Rs. 497.97 lacs in favour of respondent No.3, on creating charge over its plant and machinery and other immovable properties belonging to the guarantors; that the said loan faciliti....
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....etitioner and the creditor bank demanding them to pay a sum of Rs. 49,50,195/- payable by respondent No. 3 towards tax under A.P. VAT Act, 2005. As noted hereinabove, this demand is challenged in this Writ Petition, on the ground that under Section 26E of the SARFAESI Act, inserted by Section 18 of Act 44 of 2016 with effect from 01.09.2016, after the registration of security interest, the debts due to any secured creditor shall be paid in priority of all other debts. A counter-affidavit is filed by the Commercial Tax Officer, Ramachandrapuram Circle, wherein he has asserted the right of the Commercial Tax Department to recover the debt from respondent No.3. At the hearing, learned counsel for the petitioner placed heavy reliance on Secti....
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.... being in force, after the registration of security interest, the debts due to any secured creditor shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or 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 (31 of 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." Mr. Shaik Jeelani Basha, learned special Standing Counsel for Commercial Taxes (Andhra Pradesh) submitted t....