Whether Bank having registered mortgage of a Secured Asset with CERSAI will have priority to make its claim over the claims/charge of Sales Tax Department arising out of the dues under the Maharashtra Value Added Tax Act, 2002 (MVAT) – Punjab National Bank Vs. Assistant Commissioner of State Tax (D-815) – Bombay High Court
Hon’ble High Court held that even if there is any inconsistency between the Securitization Act and the MVAT Act, in view of Article 254 of the Constitution of India, the provisions of the Securitization Act would prevail over the provisions of the MVAT Act which is a State enactment. The issue of similar clauses have been already construed by the Full Bench of this Court in case of Jalgaon Janta Sahakari Bank Ltd. & Anr. The Court held that the non-registration of the claim and/or attachment order by the Sales Tax Authority under Section 26B(4) of the SARFAESI Act, can only be at the peril of the department. Mere recording of the purported charge in the record of right of the secured asset, in the absence of the registration with CERSAI cannot be to the detriment of the auction purchaser, though the auction sale was on “as is where is and as is what is basis”.
