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| HC quashes auction notice of the mortgaged property | | | Early Times Reporter
Jammu | Sep 10- Justice JP Singh of J&K High Court Jammu wing in a petition filed by Prabhat Terpenes and Synthetics Pvt Limited challenging taking over property of the petitioner by the SIDCO for realization of outstanding dues has quashed the auction notice issued by SIDCO on June 23, 2006 with the direction to the Corporation to get whole of the mortgaged property, sought to be put to auction, evaluated for assessing its market value and then to go head with the auction notice of the mortgaged property indicating therein the reserve bid the price for the auction.
In the petition it has been submitted that a loan Rs 56.75 lakhs at 9.5 per cent interest over and above 3.5 per cent refinanced from IDBI was obtained which was to be paid back in installments. According to the petitioner an amount of Rs 49.84 lakhs had been paid back to the SIDCO against Rs 56.75 lakhs..
Justice JP Singh, after hearing Sr. Adv UK Jalali with Adv Anil Khajuria appearing for the petitioner and Advocate General AH Naik, Sr. Adv MK Bhardwaj and Advocates VK Chopra and Ajay Abrol appearing for the respondents, observed that the Corporation is left free to devise such procedures for going ahead with the auction so as to get maximum price of the mortgaged property. Court disposed a CMP filed by appellate authority Commercial Tax Officer C T Circle- I claiming its first charge on the mortgaged property to recover sales tax arrears amounting to Rs 1,54, 35, 377.
During the course of hearing of this application Advocate General could not refer to any statuary provision of law either in the General Sales Tax Act or elsewhere on the basis it may be said that Sales Tax liability would operate as first charge on the assess of an assessed who was in default of arrears of loan amount which were payable to the SIDCO for which the SIDCO had secured its loan amount by mortgage of the properties of the petitioner company, referred a judgment of the Full Bench of the Madras High Court and rejected the CMP. Court also decided a CMP filed by the Bank of Baroda and accordingly disposed off the same which would not be maintainable
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