JUDGMENT

M.N. Bhandari, J. - By this writ petition, a challenge is made to the order dated 19th April, 2014 (corrected as 19th April, 2017). By the aforesaid order, it was informed that property of SR Foils and Tissue Ltd. was attached by the respondent-Sales Tax Officer, Special Circle-I, Bhiawadi ("respondent-department") in the year 2014 under Sections 230 and 239 of the Rajasthan Land Revenue Act, 1956 (for short "the Act of 1956") yet the petitioner-Bank sold the property to the respondent No. 5-M/s. GMC Engineers and Contractor Private Limited ("respondent-company") though in view of Section 47 of the Rajasthan Value Added Tax Act, 2003 (hereinafter referred to be as "the Act of 2003"), first charge exists thus sale is void and illegal.

2. Learned counsel for petitioner-Bank submits that property belonging to SR Foils and Tissue Ltd. was sold to the respondent company in auction under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the Act of 2002"). The auction of the property in question was made on 31st January, 2017. It was due to default of SR Foils and Tissue Ltd. in payment of loan amount thus Section 13 of the Act of 2002 read with Rule 12 of the Security Interest (Enforcement) Rules, 2002 (for short "the Rules of 2002") was invoked.

3. The respondent-company participated in the auction and being highest bidder, was asked to deposit bid amount. It was deposited by them. The petitioner-Bank declared the respondent company to be successful bidder vide letter dated 24th February, 2017. The documents relating to the property were also given apart from possession. The impugned order dated 19th April, 2014 (corrected as 19th April, 2017) came as a shock to the petitioner-Bank. The petitioner-Bank gave reply to the notice but the impugned order has not been withdrawn. The petitioner-Bank was even informed that irrespective of sale of property in auction, the State Government may auction it for recovery of their dues. A challenge to the impugned order has been made alleging it to be arbitrary and illegal.

4. Learned counsel submits that an amendment was made in the Act of 2002 to bring Section 26E. The priority is given to the secured creditors and it is with non-obstinate clause. The secured creditors have been given priority over all other debts and revenues dues, taxes, cesses and other rates payable to the Central or the State Government or local authority. The petitioner-Bank, being secured creditor, was having priority over the taxes payable to the State Government. In view of the above, the impugned order deserves to be set aside as it has been issued in ignorance of Section 26E of the Act of 2002.

5. Learned counsel has further made a reference of section 31B of the Recovery of Debts and Bankruptcy Act, 1993 (for short "the Act of 1993") where secured creditors have been given priority over all the dues which includes even the taxes of State or Central Government. The provision aforesaid is similar to Section 26E of the Act of 2002. In the light of the provision aforesaid, the State Government could not have passed the impugned order for recovery of the taxes in reference to the State Act when Central Act was amended with non-obstinate clause. After amendment in the Act of 2002 and 1993, what will prevail is the Central Legislation and not the State Act. The priority claimed by the State Government to recover the dues should not be accepted.

6. A reference of section 31 of the Specific Relief Act, 1963 has also been given. The instruments having been executed in favour of the petitioner-Bank cannot be cancelled unless the procedure given under Section 31 of the Act of 1963 is undertaken. The respondent-department failed to undertake the procedure given under the said provision. For the aforesaid reason also, impugned order deserves to be set aside.

7. It is lastly stated that impugned order has been issued in violation of section 100 of the Trans