TaxTMI 
TaxTMI 
2026 (9) TMI 387
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....dgment of the Full Bench in the case of Jalgaon Janta Sahakari Bank Limited vs. Joint Commissioner of Sales Tax (2022 SCC OnLine Bom 1767) and therefore urged that the Petition deserves to be allowed. 3. Before adverting to the rival submissions, it would be appropriate to enumerate brief facts leading to the filing of this Petition. 4. The learned counsel for the Petitioner submitted that in the year 2019, the Petitioner had sanctioned a loan of Rs. 955 Lakhs and Rs. 495 Lakhs to proprietary firms namely Raj Earth-Movers and Transport and to M/s. Kshitij Enterprises respectively. The learned counsel further submitted that the loan amounts were disbursed by the Petitioner in the years 2017, 2019 and 2020 respectively. He further submitted that as a security one of the sureties by name Uday Bhausaheb Waghere, the owner of the subject property, created mortgage over the subject property in favour of the Petitioner on 20th November, 2019 and thereafter the Petitioner disbursed the loan amount to the said borrower. The learned counsel further submitted that the Petitioner by its letter dated 20th December, 2019, requested the Talathi i.e. Respondent No. 8 to note the mortgage cha....
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....d that the Petitioner addressed a letter on 23rd January, 2024 to Respondent No. 5 and accordingly pointed out that as per Section 26E of the Act, 2002, the Petitioner who is a secured creditor has priority over all other debts and all revenues, taxes and cesses and other rates to be payable to the Central or State Government or local authority and also informed that any excessive amount after adjustment of its due would be deposited with the Respondent No 5 and accordingly requested Respondent No. 5 to withdraw the order of attachment as it was creating obstruction in selling the subject property. 9. The learned counsel submitted that as the attachment of the Income Tax Department was not withdrawn, the Petitioner vide letter dated 16th January, 2025, once again requested Respondent No. 5 to withdraw the attachment before 31st January, 2025. He further submitted that the Petitioner proceeded to sell the subject property under the provisions of the Act, 2002, to one Mr. Vishnu Gaikwad, who has made payment of 25% and the Petitioner was in the process of collecting the balance amount of 75% of the consideration. The Ld. Counsel for the Petitioner submitted that even if the purcha....
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....dings. The learned AGP further submitted that the Petitioner's request on 20th December, 2019 to note it's mortgage in the 7/12 extract came after the income tax attachment on 17th December, 2018, which was already communicated to the State Revenue Authorities and that subsequent noting of the mortgage does not negate the prior tax lien which takes precedence under Section 222 of the Income Tax Act. The learned AGP submitted that in the reply affidavit, although reference has been made to the attachment orders issued by the Income Tax Department on the basis of which the entries have been made in the revenue records, but specific reference to the proclamation has not been made. 13. We have considered the rival submissions and before we proceed to consider the same and dispose of the writ petition, it would be necessary to refer to the relevant paragraphs of the Full Bench judgment of this Court in the case of Jalgaon Janta Sahakari Bank (supra). In paragraph 85 of the said judgment, this Court held as follows:- "85. Priority means precedence or going before (Black's Law Dictionary). In the present context, it would mean the right to enforce a claim in preference to othe....
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....dering an attachment is not enough; a proclamation has to be issued in the prescribed form and such proclamation must be made public by beating of drum and such other mode as specified in section 192 of the MLR Code and rule 11(2) of the 1967 Rules before the property attached is sold. 154. We are of the considered opinion, on facts and in the circumstances, that unless attachment of the defaulter's immovable property is ordered in the manner ordained by the MLR Code and as prescribed by the MRLR Rules and due proclamation thereof is made, even the creation of charge on such immovable property may not be of any real significance, not to speak of demonstrating with reference to evidence that the transferee had actual or constructive notice of such charge. If there has been an attachment and a proclamation thereof has been made according to law prior to January 24, 2020 or September 1, 2016, i. e., the dates on which Chapter IV-A of the SARFAESI Act and section 31B of the RDDB Act, respectively, were enforced, the Department may claim that its dues be paid first notwithstanding the secured dues of the secured creditors; but in the absence of an order of attachment being ....
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....f the assessee. In the two affidavits filed on behalf of the respondents, what is conspicuous by its absence is the assertion that the respondents had ordered attachment of the secured asset in conformity with the provisions of MLR Code and the MRLR Rules. No endeavour was made by the respondents to show that the warrant of attachment and order of attachment were issued and there was a proclamation of the attachment order. 300. Likewise, the Sales Tax Commissioners did not claim that they registered the claim with the CERSAI to adhere to the mandate contained in section 26B(4) of the SARFAESI Act. Non-registration of the claim and/or order of attachment entails the consequences envisaged by sub-section (2) of section 26C of the SARFAESI Act. Thus, dual disability sets in. First, in the absence of material to show that the first charge under section 37 of MVAT Act was enforced by a valid attachment order before the registration of security interest by the petitioner with the CERSAI, the petitioner cannot be deprived of the right of priority under section 26E of the SARFAESI Act. Secondly, with the registration of the security interest with the CERSAI on July 9, 2020, couple....
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....ondent No 2 to 5 can claim priority over the dues of the Petitioner. 19. Needless to mention that the Petitioner bank having sold the secured asset to one Mr. Vishnu Gaikwad, subject to the other compliances under the SARFAESI Act, will get a clear title free from encumbrances claimed by the Respondent Nos 2 to 5. 20. In view of the above, the writ petition is allowed in terms of prayer clause (a) (b) and (c ) " a] This court be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ order or direction calling for the papers and proceedings leading to issuance of order of attachment by respondent No. 5 [Exhibit D] and after considering the legal position this court be pleased quash and set aside the order of attachment dated 17th December 2018 issued by respondent No. 5 [Exhibit D]. b] This Court pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction ordering and directing respondent Nos. 6 to 8 to remove the encumbrance noted by them in the relevant records of the subject property viz. the attachment levied by respondent Nos. 1 to 5. c....