THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.5406 of 2005 Dated:21.07.2011 Between: State Bank of India. … Petitio And The Deputy Commercial Tax Officer, Gandhinagar Circle, Hyderabad, and others. ... Responde THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.5406 of 2005 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) State Bank of India, Stressed Assets Management Bran Secunderabad, filed the instant writ petition aggrieved by the auction no dated 02.02.2005 issued by the first respondent under Section 36 of Revenue Recovery Act, 1864, read with Section 17-C of the Andhra Prad General Sales Tax Act, 1957 (APGST Act). The petitioner, statedly, advanced loans to the third respondent. borrower defaulted. The petitioner, therefore, filed an application, be O.A.No.99 of 2001, before the Debts Recovery Tribunal, Hyderabad (DRT January 2000. Pending the same, it appears, DRT appointed an Advoc Commissioner to prepare inventory of the hypothecated properties. In meanwhile, the third respondent sought a reference to the Board for Indus and Financial Reconstruction (BIFR). The same was rejected. They t approached the Appellate Authority for Industrial and Financial Reconstruc (AAIFR) and obtained stay orders. In the meanwhile, so as to recover arrears of sales tax under the APGST Act, the first respondent issued impugned auction notice. The petitioner contends that all the properties of third respondent have been mortgaged/hypothecated, that they have the charge over the properties, and therefore, they cannot be auctioned for recov of arrears of sales tax. The second respondent filed a counter affidavit. It is stated that the t respondent is a dealer on the rolls of the second respondent, that during period from 1984-1985 to 2003-2004 the third respondent did not make payment towards sales tax on the ground that the Company is before BIFR that necessary recovery proceedings were initiated for recovery of the arrear sales tax in a sum of Rs.1,02,17,394/- and arrears of central sales tax in a s of Rs.2,71,80,260/-. The second respondent also relies on Section 16-C of APGST Act as inserted by A.P.Amendment Act, 1999, which is to the effect any amount of tax, penalty, interest payable by a dealaer under the APGST shall be the first charge on the property of the dealer or person who is in arre of sales tax. This Court heard the Counsel for the petitioner and the Special Coun for Commercial Taxes. Besides reiterating the submissions as raised in affidavit accompanying the writ petition, the Counsel for the petitioner wo submit that the third respondent was ordered to be wound up by the Comp Court on 19.04.2007 and that the same is in liquidation. The Special Coun brought to the notice of this Court the decision of the Supreme Court in Cen Bank of India v State of Kerala[1] and the decision of the Division Benc this Court in Andhra Pradesh State Financial Corporation v Governmen Andhra Pradesh[2]. In Andhra Pradesh State Financial Corporation Section 16-C of APGST Act was impeached as ultra vires. Following the Central Bank of In this Court held that the first charge created by the State Sales Tax Act will h primacy and will prevail over a decree obtained by a Bank and that Section C of the APGST Act is valid and impeccable. There is no doubt that impugned auction notice was issued in furtherance of Section 16-C of APGST Act, and therefore, the same cannot be invalidated on any ground. the company was already directed to be wound up and is in liquidation, a secured creditor it is always open to the petitioner to move the Company Co In so far as the auction impugned is concerned, the same cannot be faulted. The writ petition is devoid of any merit, and is accordingly dismiss There shall be no order as to costs. _____________ (V.V.S. RAO ____________________________ (RAMESH RANGANATHAN 21.07.2011 vs [1] (2009) 4 SCC 94 [2] (2010) 51 APSTJ 117