TaxTMI 
TaxTMI 
2026 (7) TMI 1344
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....rnment Pleader appearing for respondent nos. 1 to 3. 4. By way of the present petition, the petitioners herein are constrained to invoke Article-226 of the Constitution of India, challenging the impugned action of respondent nos. 1 to 3 of not removing the charge over the land bearing Plot Nos. 1 to 12 at Revenue Survey No.119/3 and 156/1, Block No. 191 paiki, West side at Village:Karanj, Taluka: Mandavi, District: Surat, admeasuring 7185 sq.mtrs. (hereinafter referred to as "the land in question / the subject land"). 5. Briefly stated that, the land in question originally belonged to M/s. Salasar Polyfab Private Limited (hereinafter referred to as 'the borrower company'). In the year 2006-2007, the borrower company borrowed funds from respondent no. 4 by mortgaging the subject land, having created a security interest qua the land in question in favour of the respondent no. 4 within the meaning of Section 2(1b) of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as the "RDB Act") and respondent no. 4 became the secured creditor qua the subject land. 5.1. In or around 2011-2012, the borrower company defaulted in the repayment of its debts to responden....
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....gment dated 06.04.2022, the writ petition was allowed. Pursuant to the said order, the respondents removed the attachment / charge of the Income Tax Department. However, vide mutation entry No. 5854, a new charge was created over the land in question by the respondent no. 3. Under such circumstances, the writ petitioners filed an application on 21.07.2025 for removal of the charge created by respondent no. 3 over the subject land, in view of the judgment rendered in Special Civil Application No. 10314 of 2021. 5.7. By a communication dated 09.09.2025, respondent no.2 addressed a letter to respondent no. 3 seeking an opinion regarding the removal of the charge. The petitioners made several representations for the removal of the charge; however, the same have not been replied to or decided by respondent no. 3, which has given rise to the filing of the present petition, for the following prayers / reliefs: "8. The Petitioners herein, therefore, prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased ....
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....nuing the charge over the land, which was purchased by the petitioners in auction proceedings under the RDB Act is patently illegal. 6.1. It is submitted that, Section 31B of the RDB Act commences with a non-obstante clause and has an overriding effect over all other laws including the Gujarat Value Added Tax Act. 6.2. Placing reliance on the aforesaid submissions, it is submitted that the said issue is no longer res integra, as the said aspect has already been considered and decided in the case of the present petitioners in Special Civil Application No. 10314 of 2021. In view thereof, it is submitted that it is not open for respondent nos. 1 to 3 to continue the charge over the land in question. 7. Mr. Raj Tanna, learned Assistant Government Pleader is not in a position to controvert the aforesaid factual position, more particularly, the fact that the charge of respondent no. 3 was created on the subject land by mutation entry no.5854 on 19.12.2020, which is prior to the judgment rendered in Special Civil Application No. 10314 of 2021 dated 06.04.2022. Furthermore, the said charge was created after the Amendment in the RDB Act, wherein, Section 31B of the RDB Act was inco....
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....ated 06.04.2022 rendered in Special Civil Application No. 10314 of 2021. Relevant paragraph Nos. 4 to 9 of the said judgment reads thus: "4. The short point that falls for our consideration which otherwise no longer res integra is whether the bank will have the precedence over the secured assets or the Income Tax Department will have the precedence over the secured assets. 5. The Supreme Court in a recent pronouncement in the case of Punjab National Bank Vs. Union of India and Others, Civil Appeal No.2196 of 2012 decided on 24.02.2022 has taken the view that once any immovable property is mortgaged / hypothecated towards secured creditors then having regard to the provisons contained in Section 2(zc) to (zf) of the SARFAESI Act, 2002 read with the provisions contained in Section 13 of the SARFAESI Act, 2002, the secured creditor will have the first charge on the secured assets. The Supreme Court proceeded to hold that Section 35 of the SARFAESI Act, 2002 inter alia provides that the provisions of the SARFAESI Act shall have overriding effect on all other laws. 6. In the case on hand, the Income Tax Department obviously would rely upon the provisions of Se....
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....y the Tax Recovery Officer-Respondent No. 4 under Rule 2 of Schedule II to the Act. It is true that the sale was conducted after the issuance of the notice as well as the attachment order passed by Respondent No. 4 in 2003, but the fact remains that a charge over the property was created much prior to the notice issued by Respondent No. 4 on 16.11.2003. The High Court held that Rule 16(2) is applicable to this case on the ground that the actual sale took place after the order of attachment was passed by Respondent No. 4. The High Court failed to take into account the fact that the sale of the property was pursuant to the order passed by the DRT with regard to the property over which a charge was already created prior to the issuance of notice on 11.02.2003. As the charge over the property was created much prior to the issuance of notice under Rule 2 of Schedule II to the Act by Respondent No. 4, we find force in the submissions made on behalf of the Appellant." 9. In view of the aforesaid, this writ application succeeds and is hereby allowed. The impugned letter / order dated 24.05.2021 and 31.12.2020 respectively at Annexure F are hereby quashed and set aside. The respond....
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....enactment, the language of the said provision also clearly indicates the intention of the Parliament to give precedence even over the Government dues notwithstanding anything to the contrary in any other law. 34. We are sure of one thing that there exists no repugnancy in the two legislations. The intention of the Parliament could not be said to nullify the State enactment providing the first charge on the property. The legislations have been made by the Central Government and the State respectively under Entries I and II of the Schedule and not of the Concurrent List. The amendment made by the Parliament is to give priority to the secured creditors vis-a-vis the State dues without speaking about the first charge. This aspect was duly considered by the Supreme Court in the case of Central Bank of India (supra). The amended provision, i.e. Section 26E of the SARFAESI Act and Section 31B of the RDB Act, would have been different as indicated by the Apex Court in the case of Central Bank of India (supra). 35. While it is true that the Bank has taken over the possession of the assets of the defaulter under the SARFAESI Act and not under the RDB Act, Section 31B of the....