Section 31B of Recovery of Debts and Bankruptcy Act, 1993 (RDB Act, 1993) would override the Section 88 of Finance Act, 1994 – The Pr. Commissioner of CGST & CX Vs. State Bank of India and Ors. – DRAT Chennai
April 11, 2024
Hon’ble DRAT Chennai has upheld the decision of DRT where it was held that Section 31B of RDB Act, 1993, makes it very clear that rights of Secured Creditors over the secured assets will have precedence over all Government dues including taxes. This provision has come into force in 2016, and the provision under which Appellant relies on, is of the year, 1994, therefore, Section 31B of RDB Act, 1993, would override the provision relied on by Appellant. In other words, Section 31B of RDB Act, 1993, clarifies that the rights of Secured Creditors will have precedence over all Government dues including taxes, and it prevails over Section 88 of Finance Act, 1994.
