Page 118 - GSTL_21st May 2020_Vol 36_Part 3

364 GST LAW TIMES [ Vol. 36
The consideration by the Court
37. From the above narrated facts it is clear that the 6th respondent
owed amounts to the petitioner for loans borrowed by it, Service Tax dues to re-
spondents 1-3 and Provident Fund dues to the 5th respondent. The 6th respond-
ent supports the claim of respondents 1-3.
38. The 6th respondent received an Income Tax refund Order for
Rs. 35,75,95,400/- on 20-5-2019 and it was credited into the TRA account of the
6th respondent in the petitioner Bank at its CCG Branch, Hyderabad.
39. The question is “which of the parties is entitled to take this amount?”
Whether the claim of petitioner prevails over the claim of the respondents 1-3?
40. In this regard, we shall first consider the rival claims of the petition-
er Bank and the respondents 1-3.
41. Section 87(b)(i) of the Finance Act, 1994 states :
“87. Recovery of any amount due to Central Government. - Where any
amount payable by a person to the credit of the Central Government under
any of the provisions of this Chapter or of the rules made thereunder is not
paid, the Central Excise Officer shall proceed to recover the amount by one
or more of the modes mentioned below :-
(a) ... the Central Excise Officer may deduct or may require any
other Central Excise Officer or any officer of customs to de-
duct the amount so payable from any money owing to such
person which may be under the control of the said Central Ex-
cise Officer or any officer of customs;
(b)(i) the Central Excise Officer may, by notice in writing, require any
other person from whom money is due or may become due to such
person, or who holds or may subsequently hold money for or on ac-
count of such person, to pay to the credit of the Central Government
either forthwith upon the money becoming due or being held or at or
within the time specified in the notice, not being before the money
becomes due or is held, so much of the money as is sufficient to pay
the amount due from such person or the whole of the money when it
is equal to or less than that amount;
… …” (emphasis supplied)
42. Section 88 of the Finance Act, 1994 states :
“88. Liability under Act to be first charge. - Notwithstanding anything to
the contrary contained in any Central Act or State Act, any amount of [tax]
penalty, interest, or any other sum payable by an assessee or any other person
under this chapter, shall, save as otherwise provided in Section 529A of the
Companies Act, 1956 (1 of 1956) and the Recovery of Debts Due to Banks
and the Financial Institutions Act, 1993 (51 of 1993) {the Securitisation and Re-
construction of Financial Assets and the Enforcement of Security Interest Act,
2002 and the Insolvency and Bankruptcy Code, 2016], be the first charge on
the property of the assessee or the person as the case may be.”
(emphasis supplied)
43. Thus the claim of the Service Tax dues of 6th respondent of
Rs. 59,20,19,079/- made by the respondents 1-3 will be a first charge is subject to
the provisions in the Recovery of Debts Due to Banks and the Financial Institu-
tions Act, 1993 (51 of 1993) (later renamed as Recovery of Debts and Bankruptcy

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