G. Rohini, J.

The petitioner is a Nationalized Bank. The 3rd respondent herein availed a loan from the petitioner Bank by mortgaging certain immovable properties for securing repayment. Since the 3rd respondent committed default in repayment, the petitioner Bank filed O.S.No.24 of 2004 on the file of the Court of Senior Civil Judge, Suryapet for recovery of money by sale of the mortgaged properties. The said suit was decreed by judgment dated 3.4.2006 and a preliminary decree was passed in favour of the petitioner Bank. Pursuant thereto, the petitioner filed I.A.No.135 of 2008 for a final decree and the same is pending.

While so, the 1st respondent – Deputy Commercial Tax Officer issued sale notice dated 18.08.2008 proposing to auction the property mortgaged by the 3rd respondent Bank in favour of the petitioner Bank purportedly under the A.P. Revenue Recovery Act, 1864 (for short, ‘the Revenue Recovery Act’) for recovery of the arrears of commercial tax amount of Rs.1,74,530/-. The petitioner got issued a legal notice dated 28.2.2008 informing the 1st respondent that a preliminary decree has already been passed in its favour on 3.4.2006 in respect of the properties in question and requesting to withdraw the property in question from the auction. However, the 1st respondent by reply notice dated 10.3.2008 contended that the property was attached by them towards arrears of tax dues under Section 27 of the Revenue Recovery Act published in the District Gazette dated 25.1.2008 and thus claimed priority of charge under Section 16C of the A.P. General Sales Tax Act, 1957 (for short, ‘APGST Act’) and Section 26 of the A.P. Value Added Tax Act, 2005 (for short, ‘APVAT Act’) over the property in question under the category of crown debt.

Aggrieved by the said action of the 1st respondent, this writ petition is filed seeking a declaration that the proceedings of the 1st respondent dated 22.01.2008 under Section 27 of the RR Act published in Nalgonda District Extraordinary No.392, dated 25.01.2008 attaching the property of the respondent Bank is arbitrary and illegal.

The 1st respondent filed a counter contending that the respondent No.3 did business under the name and style of M/s. Pabba Bixamaiah General Merchants and Commission Agent and fell in arrears of tax of Rs.1,74,530/- during the years 1995-96 to 2000-01. In spite of repeated demands, the said dealer failed to clear the above arrears and therefore the action was taken under the provisions of the Revenue Recovery Act and the dealer’s house property was attached and the same was brought to sale in public auction on 26.03.2008 after giving wide publicity in the area. The auction proceedings were conducted in the presence of two employees of Suryapet Municipality and the respondent No.4 herein was declared as the highest bidder for a sum of Rs.5,87,000/-. Accordingly, the respondent No.4 deposited the bid amount on 23.4.2008 and 24.4.2008 i.e., within 30 days as prescribed under Section 36 of the Revenue Recovery Act. It is also stated that the Sub-Registrar, Suryapet issued a certificate stating that the market value of the property is Rs.7,49,139/- for the purpose of registration and their investigations in the local area revealed that the property would fetch Rs.5 lakhs. However, to protect the interest of the petitioner and the Government, the 1st respondent mentioned the estimated value of the property as Rs.9 lakhs in Form-7A notice in the auction conducted on 26.3.2008. The highest bid received was Rs.5,87,000/- and the same was accepted. The allegations of irregularities in conducting auction were denied and it is explained that five persons participated in the auction depositing the earnest money and the 4th respondent offered the highest amount of Rs.5,87,000/-. It is also stated that the 3rd respondent who is defaulter did not raise any objection as regards value and auction proceedings. It is further contended that in terms of Section 16C of the APGST Act any am