Gujarat Value Added Tax 2003

Section 48

Validity of Auction Notice - Restraint from Auction of assets - Claim of charge towards secured assets -

The subject matter of challenge in this appeal was that auction notice issued by authority in exercise of power under section 46. The auction notice was issued by authorities putting forward the claim of first charge over the assets of the original borrower. The first charge was sought to be claimed on the strength of section 48. To put it in other words, the stance of authorities was that the State has to recover an amount towards the sale tax from the original borrower and, therefore, authorities have the right to recover the said amount from the immovable assets of original borrower. The only question which needed to decide was, whether the state can put forward its claim of first charge over the secured assets of the borrower or Bank would have the first charge Held: The issue was no longer res-integra in view of the pronouncement of this Court in the case of Kalupur Commercial Co-operative Bank Ltd. v. State of Gujarat ((SCA No. 1789 of 2018, decided on 23-9-2019)). This court had ruled that Bank would have the first charge over the secured assets of the original borrower & such a claim cannot be defeated by virtue of section 48. No further adjudication of this writ application was necessary. Bank was permitted to put the secured assets of original borrower to auction and the auction proceedings have attained finality.

REFERRED : Kalupur Commercial Co-Operative Bank Ltd. v. State of Gujarat (SCA No. 1789 of 2018, decided on 23-9-2019)

FAVOUR : In assessee's favour

A.Y. :

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