Gujarat High Court
State Of Gujarat vs S Kumar Multiproducts Private Limited on 27 November, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/CA/5620/2025 ORDER DATED: 27/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL APPLICATION (FOR CONDONATION OF DELAY) NO. 5620 of
2025
In F/LETTERS PATENT APPEAL NO. 30218 of 2025
With
F/LETTERS PATENT APPEAL NO. 30218 of 2025
In
R/SPECIAL CIVIL APPLICATION NO. 12848 of 2023
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2025 In F/LETTERS PATENT
APPEAL NO. 30218 of 2025
In
R/SPECIAL CIVIL APPLICATION NO. 12848 of 2023
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STATE OF GUJARAT & ORS.
Versus
S KUMAR MULTIPRODUCTS PRIVATE LIMITED & ORS.
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Appearance:
MS. HETAL PATEL, ASSISTANT GOVERNMENT PLEADER for the
Applicant(s) No. 1,2,3
MR. AJAY R. MEHTA WITH MR. ANMOL A MEHTA(8390) for the
Respondent(s) No. 1,2
BHASKAR SHARMA(9209) for the Respondent(s) No. 3
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA
AGARWAL
and
HONOURABLE MR.JUSTICE SANJEEV J.THAKER
Date : 27/11/2025
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. Learned advocate Mr. Bhaskar Sharma has put in appearance
on behalf of the respondent No.3 bank.
2. Having heard Ms.Hetal Patel, learned Assistant
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C/CA/5620/2025 ORDER DATED: 27/11/2025
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Government Pleader appearing for the State Appellants and
perused the record, pertinent is to note that the present intra-
court appeal is delayed by 598 days, of which no proper
explanation could be furnished in the application seeking
condonation of delay.
3. Besides that, since the learned counsel for the appellants
has argued on the merits of the case, we may note that the
writ petition, out of which the present appeal has arisen, was
filed by the auction purchaser of a property which was subject
matter of the auction proceedings through e-auction held on
10.07.2007. The original petitioners/auction purchasers had
deposited the entire sale consideration and the sale certificate
dated 12.10.2007 was issued in his favour by the respondent -
Bank. A mutation entry dated 2.5.2008 had also been
recorded in the revenue records. The petitioner, thereafter,
approached this Court to cancel/ withdraw the charge over
the property in question.
4. Pertinent is to note that in the Writ Petition, the
Department of Sales Tax and the Chief Commissioner of Sales
Tax were impleaded as respondents nos. 1 and 2 and though
Rule had been issued by the Writ Court, however, no response
admittedly was submitted on behalf of the said respondents
namely the appellant herein, before the Writ Court.
5. The Writ Court vide judgment and order dated
04.01.2024 on reading of the Rule 26 E of the Securitisation
and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (in short referred as "SARFAESI
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C/CA/5620/2025 ORDER DATED: 27/11/2025
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Act, 2002") and the decision of the Apex Court, interpreting
the provisions of Section 26 E, has held that the charge of the
secured creditor shall precede over the charge of unsecured
creditor, namely the Department of Sales Tax. It was noted by
the learned Single Judge that the petitioner is an auction
purchaser who has purchased the property in an auction
proceedings conducted by the respondent - Bank and the
respondent Bank being the Secured Creditor shall have
priority over all the debts, revenues, taxes, cesses, and other
rates payable to the Central or State Government or local
authority.
6. It was, thus, directed that the revenue authorities are
required to mutate the name of the petitioner in the revenue
records by setting aside the entry of attachment or charge
over the property in question created by the Sales Tax
Department.
7. Pertinent is to note that though the Sales Tax
Department has filed the present appeal challenging the order
of passed by the learned Single Judge without filing its
response before the Writ Court, but even in the present
appeal, there is no disclosure as to how and when the charge
was created by the Sales Tax Department over the property in
question. There is a complete silence in the memo of appeal as
to the proceedings, if any, initiated by the appellant, namely
Sales Tax Department under the Gujarat Value Added Tax,
2003 with respect to the property in question.
8. On a query made by the Court, Ms.Hetal Patel, learned
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C/CA/5620/2025 ORDER DATED: 27/11/2025
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Assistant Government Pleader appearing for the State
appellant would invite the attention of the Court to Page No.
'116' of the paper-book which is the copy of Village Form
No.6, wherein an entry of the charge of Sales Tax Department
over the property in question has been made. Reliance is
placed on Section 48 of the Gujarat Value Added Tax, 2003 to
submit that the amount payable by any person on account of
tax, interest or penalty shall be the first charge on the
property of such person.
9. However, pertinent is to note that for creation of charge
under Section 48, proceedings under Section 44, 45 or 46 of
the Gujarat Value Added Tax, 2003 were to be initiated. In
absence of any disclosure about the initiation of any
proceeding under the Gujarat Value Added Tax, 2003, prior in
point of time than the recovery proceedings initiated under
the SARFAESI Act, 2002 for registration and attachment of
the secured assets, so as to create a charge over the property
in question by the Bank, it is not possible for us to appreciate
the submissions made by the learned Assistant Government
Pleader placing reliance upon the provisions of Section 48 of
the Gujarat Value Added Tax, 2003.
10. Further, the learned counsel for the respondent namely
the original petitioner by placing the entries at Page No.'116'
of the paper-book, which is Village Form No.6 would
demonstrate that the entry of the charge created by the Bank
is prior in point of time than the entry of the charge created
by the Sales Tax Department therein.
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11. As the appellants have not placed any material before
the Writ Court by filing their reply and further there is a
complete silence in the present appeal filed by the Sales Tax
Department, the submissions made about the overriding effect
of Section 48 of the Gujarat Value Added Tax, 2003, being a
subsequent legislation than the SARFAESI Act, 2002, cannot
be appreciated, in absence of the factual details.
12. For the facts appreciated by the learned Single Judge,
we do not find any error in the judgment impugned, which
cannot be said to be passed on any incorrect interpretation of
Section 26-E of the SARFAESI Act, 2002.
13. As no foundation has been laid to assert that the charge
over the property in question was created by the Sales Tax
Department under the Gujarat Value Added Tax, 2003, prior
in point of time, than the charge created by the respondent
Bank, the precedence given by the learned Single Judge to the
provisions of Section 26-E of SARFAESI Act, 2002, cannot be
said to suffer from any error of law.
14. For the above, we do not find any good ground to
interfere. The appeal stands dismissed, both on the grounds of
delay as well as on merits. Pending Civil Application is also
disposed of.
(SUNITA AGARWAL, CJ )
(SANJEEV J.THAKER,J)
C.M. JOSHI
