ORDER :

The writ petitioner is a nationalized bank. The third respondent had availed loan from the petitioner. To secure the same, the petition mentioned mortgage was also created on 27.02.2013. It was done by registered memorandum of deposit of title deeds in favour of the petitioner. The borrowers did not repay the loan. Therefore, their account was classified as non-performing asset. The secured asserts were brought to sale by following the provisions of SARFAESI Act. On 27.12.2019, the bank had sold the mortgaged property in favour of certain auction purchasers. The bank had also issued sale certificates in favour of the purchasers on 26.02.2020. But the sale certificates could not be registered because the second respondent had attached the properties in the meanwhile and the encumbrance certificate reflects the attachment effected by the second respondent. That necessitated filing of this writ petition.

2. In this writ petition, the bank challenges the impugned attachment order issued by the second respondent on 28.11.2017. The writ prayer is strongly contested by the second respondent. The second respondent has also filed a detailed counter. The learned Additional Government Pleader appearing for the second respondent would submit that in terms of Section 24(2) of Tamil Nadu Value Added Tax Act, the department will have priority over all other claims against the property of the dealer. The learned Additional Government Pleader places strong reliance on the order dated 17.03.2020 made in W.P.No.48989 of 2006. In the said, it has been held as follows:-

“The Supreme Court categorically held that the charge of the Sales Tax Department is the first charge on the property and it has priority over all other charges on the property including a mortgage. The Supreme Court categorically stated that the charge operates on the entire property of the dealer including the interest of the mortgagee therein.

Referring to Dattatreya Shanker Mote's case reported in (1974) 2 SCC 799, the Supreme Court held that :

".........a charge is a wider term than a mortgage. It would cover within its ambit a mortgage also. Therefore, when a first charge is created by operation of law over any property, that charge will have precedence over an existing mortgage."

3. The learned Additional Government Pleader would therefore contend that in light of the said decision, this Court has to recognize that the Government will have priority over all other claims against the property of the dealer. Hence, he presses for dismissal of this writ petition.

4. Though there is a considerable weight in the arguments advanced by the learned Additional Government Pleader, I am not in a position to accept the same for two reasons. I posed a direct question to the learned Additional Government Pleader, which liability was prior in point of time. It is obvious that the mortgage was created way back on 27.02.2013 while the attachment order was issued only on 28.11.2017. The attachment order also pertains to tax dues of the dealer in respect of the years 2016 – 2017. Therefore, one cannot deny the fact that the claim of the second respondent against the property in question arose later in point of time. When the bank mortgage is prior in point of time, the question is whether the Commercial Tax Department ought to be allowed to claim priority.

5. As rightly pointed by the learned counsel appearing for the petitioner, this issue has been decided in quite a few decisions in favour of the bank. He drew my attention to the order dated 18.08.2020 made in W.P.No.17620 of 2019 (Tamil Nadu Mercantile Bank Ltd., Vs. The Sub Registrar, Office of the Sub Registrar, Panruti and two others.) The Hon'ble Judge in the said decision held as follows:-

“(4) The issue involved in the present writ petition, is directly covered by the earlier order passed by this Court dated 03.08.2020 in WP.No. 1680 of 2020. The relevant portion of the order is extracted hereunder:-

''12 It is now a well settled princi