TaxTMI 
TaxTMI 
2022 (6) TMI 374
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....R R-5) O R D E R Petitioners herein are purchasers of property in reference for consideration of Rs.3,71,50,000/- in an E-auction conducted by respondent No.5-Bank in proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short SARFAESI Act) for default in payment of Loan Cash Credit etc. by previous owner of property M/s Dev Bhumi Ispat. 2. Respondent No.5-Bank has issued Sale Certificate in favour of petitioners, but respondents No. 1 and 2, for the charge recorded in revenue record in favour of respondent No.3 H.P. State Electricity Board for outstanding electricity bill and respondent No.4-State Excise and Taxation Department for outstanding taxes declared ....
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....02 and in furtherance thereto, had advertised public notice for E-auction of suit property in newspaper dated 12.7.2019 proposing E-auction on 30.7.2019. In E-auction, petitioners were confirmed as highest bidders and to this effect, respondent No.5-Bank had issued Certificate of Confirmation of Sale of property under SARFAESI Act, 2002 vide communication/certificate dated 2.8.2019 (Annexure P-3). Thereafter, on depositing sale amount of Rs.3,71,50,000/- including TDS amount, Sale Certificate dated 4.11.2019 (Annexure P-1) was issued by Authorized Officer. In sequel thereto, possession of suit property was handed over to petitioners and a certificate of handing and taking over the possession was issued on 5.11.2019. 4. It is also on reco....
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....4 is that in view of Section 26 of H.P. Value Added Tax Act 2005 (in short HPVAT), respondent No. 4, on the basis of "Doctrine of Priority of State's Debt" treating the unpaid tax as a "Crown Debt" as first charge over the property in reference, irrespective of mortgage created by M/s Dev Bhumi Ispact in favour of respondent No.5-Bank and irrespective of provisions of SARFAESI and RDB Acts; it has first charge. 7. To substantiate its claim, State has placed reliance on Central Bank of India vs. State of Kerala & others, reported in (2009)4 SCC 94, wherein it was held that in terms of Section 26-B of Kerala Act, the State had got prior charge over the property of defaulter in preference to financial institutions/bank. 8. In reply filed....
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....upon the secured assets or respondent No.4-Excise Department shall have first charge on such property irrespective of creation of charge in the assets in favour of secured creditors. Therefore, it is not a tax matter, which is required to be listed before Division Bench as per roster and, therefore, I proceed to decide this petition. 12. Petitioners to substantiate their claim have relied upon judgment of the Supreme Court in UCO Bank and another vs. Dipak Debbarma and other, reported in (2017)2 SCC 585; pronouncement dated 24.2.2022 of the Supreme Court in Civil Appeal No. 2196 of 2012, titled Punjab National Bank vs. Union of India and others; judgment of this Court in Punjab National Bank vs. State of HP, reported in 2021(3) Shi....
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....reme Court in UCO Bank's case (referred supra), by virtue of provisions of Article 246(1), the Parliamentary Legislation would prevail and such Legislation will have to give way notwithstanding the fact that the State Legislation is within demarcated field. 17. The Supreme Court in its recent decision dated 24.2.2022 passed in Civil Appeal No. 2196 of 2012 titled Punjab National Bank vs. Union of India, reported in (2022 SCC Online SC 227) has held that provisions contained in SARFAESI Act, 2002 will have an overriding effect on the provisions of Central Excise Act of 1944. Therefore, the provisions of SARFAESI Act shall have priority not over the State Excise Act but also over the Central Excise Act. 18. A Coordinate Bench of this Co....