Page 114 - GSTL_21st May 2020_Vol 36_Part 3

360 GST LAW TIMES [ Vol. 36
tice under Section 87 of Finance Act, 1994 cannot be sustained in law. [paras 38,
47, 56, 58, 60]
Recovery of amount for Provident Fund contributions and damages -
Section 11 of Employees Provident Fund and Miscellaneous Provisions Act,
1952 although contains a non obstante clause creating a first charge to claim for
Provident Fund dues over all other debts, there is also a non obstante clause in
Section 31B of Recovery of Debts and Bankruptcy Act, 1993 and Section 26E of
Securitisation and Reconstruction of Financial Assets and Enforcement of Se-
curity Interest Act, 2002 - Former statute is one of 1952 while the other two en-
acted in 1993 and 2002 respectively - In case of conflict between two special
Acts where both contain non obstante clauses, the said clause in the later Act
will prevail - Consequently, even the 5th respondent’s claim for the Income
Tax refund amount credited to assessee’s Bank account with the petitioner-
bank cannot prevail over petitioner’s claim for the same by way of adjustment
to its dues. [paras 62, 63, 64, 66]
Petition allowed
CASES CITED
Bank of Baroda v. State of Gujarat — MANU/GJ/1885/2019 — Relied on.................................... [Para 57]
Central Bank of India v. State of Kerala — (2009) 4 SCC 94 — Distinguished ... [Paras 49, 51, 53, 54, 55]
Solidaire India Ltd. v. Fairgrowth Financial Services Ltd. — (2001) 3 SCC 71 — Relied on.. [Paras 64, 65]
[Order per : M.S. Ramachandra Rao, J.]. - The petitioner in this Writ Pe-
tition is the State Bank of India, rep by its DGM and Branch Head, Stressed asset
Management Branch, Hyderabad.
2. In this Writ Petition, the petitioner has challenged the notice F.No.
INV/DGCEI/HZU/ST/49/2016-17, dated 11-6-2019 issued by the Deputy Direc-
tor, Directorate General of GST Intelligence, Hyderabad Zonal Unit (3rd re-
spondent) issued under Section 87 of the Finance Act, 1994 as being contrary to
the Recovery of Debts and Bankruptcy Act, 1993 and the Securitisation and Re-
construction of Financial Assets and Enforcement of Security Interest Act, 2002
(for short ‘the SARFAESI Act, 2002’) and seeks to have it set aside.
3. The 1st respondent herein is the Union of India, Ministry of Finance
rep by its Secretary, Service Tax Wing, New Delhi; the 2nd respondent is the Di-
rector General of GST Intelligence, Hyderabad Zonal Unit; the 4th respondent is
the Deputy commissioner of Income tax, circle 3 (1), Hyderabad; the 5th re-
spondent is the Regional Provident Fund Commissioner-II & its Recovery Of-
ficer, Regional Office, Hyderabad.
4. The 6th respondent is M/s. SEW Infrastructures Limited, Green-
lands, Hyderabad, a Company incorporated under the Companies Act, 1956.
5. The petitioner Bank in its banking activity had sanctioned limits of
Rs. 820 Crores to the 6th respondent with working capital limits of Rs. 198 crores
(Fund based) and Rs. 622 Crores (Non Fund based) and the limits were renewed
during February, 2016 along with consortium Banks.
6. The 6th respondent created a first charge by way of hypothecation of
all its current assets and receivables as primary security and a mortgage over its
immoveable properties as collateral security.
7. The loan accounts of the 6th respondent were classified as ‘Non Per-
forming Assets’ as on 8-1-2016 as per the Reserve Bank of India norms. The peti-
tioner then initiated proceedings under the SARFAESI Act, 2002 by issuing a
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