Judgment : .1. An interesting question namely whether the charge created on the properties in pursuance of section 24(1) of Tamil Nadu General Sales Tax Act, 1959. (hereinafter referred to as ‘The Tamil Nadu Act’) will prevail over a charge created under a mortgage of the very same properties in favour of the petitioner Bank which is prior in point of time, is to be decided in this writ petition. 2. Petitioner Canara Bank has approached this Court to issue a writ of mandamus directing the 1st respondent to forbear from selling the properties of the 2nd respondent or taking any further steps in the sale of the scheduled mentioned properties in pursuance of Form No.VI A notice, to sell the land dated 111. 1990 issued by the first respondent. 3. The brief facts are stated hereunder: The second respondent have been enjoying certain credit facilities from the petitioner Bank. The said Company was granted on 17. 1974 and earning cash credit facility to the tune of Rs. 50, 000 on the 2nd respondent hypothicating the stock-in-trade and also creating mortgage over the landed property bearing Survey No. 161 (Part), Porur Village, Saidapet Taluk of an extent of 4680 sq. ft. The charge created by the 2nd respondent Company with the petitioner’s Bank w as registered with the Registrar of Companies. The petitioner Bank has also filed mortgage suit in C.S.No. 801 of 1984 on the file of Original Side of this Court against the 2nd respondent herein and others. It is further stated that the 2nd respondent Company seems to have left some arrears of sales tax due to the Government subsequent to the creation of mortgage in favour of the petitioner Bank. The first respondent- sales tax authority seems to have initiated proceedings claiming sales tax issued to them and since the arrears of sales tax were not paid, the sales tax authorities attached the immovable property covered in the mortgage belonging to the 2nd respondent Company. The petitioner Bank now come to know that in pursuance of the attachment effected over the said property, the first respondent has taken steps to bring the property for sale on 211. 1990 and again on 12. 1991. The petitioner Bank now come to know that in pursuance of the attachment effected over the said property, the first respondent has taken steps to bring the property for sale on 211. 1990 and again on 12. 1991. Since the petitioner Bank has got a first charge over the properties, properties are now brought for sale worth more, than several lakhs and is almost the only security available to the petitioner Bank for the amounts due to them. Notice in Form VII of the first respondent is illegal, violative of statutory provisions and without jurisdiction. In such circumstances, they filed the above writ petition. .4. The first respondent has filed a counter affidavit disputing various averments made by the petitioner. The 2nd respondent Company were in arrears of sales tax of Rs. 2, 03, 331 for the years from 1975-76 to 1980-81 under the Tamil Nadu Act and Central Sales Tax Act, 1956 (hereinafter referred to as ‘The Central Act’). As they did not pay the arrears regularly, proceedings were initiated. They have immovable properties in the jurisdiction of Porur Assessment Circle. The Deputy Commercial Tax Officer, So wcarpet II, therefore requested the Commercial Tax Officer, Porur Assessment Circle to proceed against the property of the defaulter in his jurisdiction to recover the sales tax arrears due by him. Therefore, the Commercial Tax Officer, Porur Assessment Circle initiated revenue recovery proceedings. In the meantime, the petitioner Canara Bank has filed the above petition stating that the assessee in default had created an equitable mortgage by their document dated 11. 1975 in favour of Canara Bank, T. Nagar, Madras 600 007. It is stated as per Section 24(1) of the Tamil Nadu Act, if default is made in paying, according to the notice of assessment where the tax has been assessed, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax assessed or any other amount due under the Act. Therefore the action taken by the Commercial Tax Officer, Porur Assessment Circle attaching the landed property of the 2nd respondent towards arrears of sales tax due by him for the years 1975-76 to 1980-81 are legal and valid and the petitioner Bank cannot say that as secured creditor it has first charge over the said property. Therefore the action taken by the Commercial Tax Officer, Porur Assessment Circle attaching the landed property of the 2nd respondent towards arrears of sales tax due by him for the years 1975-76 to 1980-81 are legal and valid and the petitioner Bank cannot say that as secured creditor it has first charge over the said property. With these averments, the first respondent prayed for dismissal of the writ petition. 5. In the light of the above pleadings, I have heard Mr. Balachander, learned counsel for the petitioner and Mr.A. Chandrasekaran, learned Government Advocate (Taxes) for the first respondent. 6. It is the case of the petitioner Bank that in as much as the 2nd respondent Company had executed a mortgage deed even on 11. 1975 creating a charge of the immovable properties mentioned in the schedule therein in favour of the Bank, it is not open to the respondent to bring the very same property for sale for the tax arrears for the assessment years 1975-76 to 1980-81. In other words, according to the petitioner, in the light of Section 24(1) of the Tamil Nadu Act, as it stood and in view of the fact that the mortgage in favour of the Bank is prior to the tax due, they get priority over the claim of the first respondent. .7. In this regard, it is worthwhile to refer Section 24(1) of the Tamil Nadu Act. .“ Payment and recovery of tax: The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than twenty-one days from the date of service of the days from the date of service of the notice. If default is made in paying according to the notice of assessment, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act. ” (Emphasis supplied) 8. The learned Government Advocate by pointing out that if default is made in paying tax even after notice of assessment, it has become immediately due and a charge is created on the properties of the person liable to pay tax under the Act. ” (Emphasis supplied) 8. The learned Government Advocate by pointing out that if default is made in paying tax even after notice of assessment, it has become immediately due and a charge is created on the properties of the person liable to pay tax under the Act. There is no dispute that the second respondent company committed default in payment of tax arrears for the assessment years 1975- 76 to 1980-81. It is clear that after the notice of assessment, any amount is outstanding on the date of default, a charge is created on the properties of the person automatically. Mr. Balachander brought to my notice the amendment to Section 24(1) of the Tamil Nadu Act. The amended sub-clause (2) is as follows: Amendment to Section 24, Tamil Nadu Act 1 of 1959: In Section 24 of the Principal Act, for sub-section (2), the following sub- section shall be substituted, namely: (2) Any tax assessed on, or any other amount due under this Act from, a dealer or person and any fee due from him under this Act, shall subject to the claim of the Government in respect of land revenue and the claim of the Land Development Bank in regard to the property mortgaged to it under Section 28(2) of the Tamil Nadu Cooperative Land Development Banks Act, 1934 (Tamil Nadu Act X of 1934), have priority over all other claims against the property of the said dealer and the same may without prejudice to any other mode of collection be recovered- (a)....... (b)....... (Italics Supplied) 9. The amended Act nodoubt makes it clear that any tax assessed or any other amount due under the Act shall be subject to the claim of the Government in respect of land revenue and the claim of the land Development Bank in regard to the property mortgaged to it have priority over all other claims against the property of the said dealer. By pointing out the absence of the words “priority over all other claims” in the amendment to Section 24(1), the learned counsel for the petitioner would contend that the mortgage in favour of the petitioner Bank being prior to assessment dues they alone entitled for priority on the basis of the prior basis of the properties mortgaged by way of mortgage deed dated 17. 1975 advanced loan and provided credit facilities to the 2nd respondent. 1975 advanced loan and provided credit facilities to the 2nd respondent. Even though the word “priority over all other claims” was introduced only by the amendment Act, in the light of specific clause under Section 24(1), the assessing authority is entitled to bring the properties for sale to recover the t ax arrears. Even though the 2nd respondent company had executed mortgage deed creating a charge over the properties, even on 11. 1975, the fact remains that the said properties are the properties of the 2nd respondent company and the same are being enjoyed only by them. 10. Now, I shall consider the decisions referred to by the learned Government Advocate. 11. This aspect was considered by the Hon’ble Supreme Court in S.B.B. & J v. National Iron and Steel Rolling Corpn, 96 S.T.C. 612. While considering the similar provision in Rajasthan Sales Tax Act, 1954 and in similar circumstances, their lordships have concluded as follows: “In the present case we have to consider whether the statutory first charge which was created under Section 11-AAAA of the Rajasthan Sales Tax Act over the property of the dealer or a person liable to pay sales tax and/or other dues under the Rajasthan Sales Tax Act, is created in respect of the entire interest in the property or only the mortgagor’s interest in the property when the dealer has created a mortgage on the property. In other words, will the statutory first charge have priority over an earl ier mortgage. It was argued by Mr. Tarkunde, learned counsel for the appellant bank, that at the time when the statutory first charge came into existence, there was already a mortgage in respect of the same property. Therefore the only property which was possessed by the dealer and/or person liable to pay tax or other dues under the Rajasthan Sales Tax Act, was equity of redemption in respect of that property. The first charge would operate, therefore, only on the equity or redemption. The arguments though ingenious, will have to be rejected. Where a mortgage is created in respect of any property, undoubtedly an interest in the property is carved out in favour of the mortgagee. The mortgagor is entitled to redeem his property on payment of the mortgage dues. This does not, however, mean that the property ceases to be the property of the mortgagor. Where a mortgage is created in respect of any property, undoubtedly an interest in the property is carved out in favour of the mortgagee. The mortgagor is entitled to redeem his property on payment of the mortgage dues. This does not, however, mean that the property ceases to be the property of the mortgagor. The title to the property remains with the mortgagor. Therefore, when a statutory first charge is created on the property of the dealer, the property subjec ted to the first charge is the entire property of the dealer. The interest of the property is not excluded from the first charge. The first charge, therefore, which is created under Section 11 -AAAA of the Rajasthan Sales Tax Act will operate on the property as a whole and not only on the equity or redemption as urged by Mr. Tarkunde.” 12. Again their Lordships have observed as follows: “We find support for this conclusion in the observations made in Fisher and Lightwood’s Law of Mortgage, 10th Edition at page 33 where the statutory charges are discussed. In dealing with a statutory charge in favour of rating authorities in respect of rating surcharges for unused commercial buildings under the General Rate Act, 1967, it is stated that a statutory charge has priority to the interest of the mortgagee under a mortgage existing when the charge arose’. In the case of Westminister City Council v. Haymarket Publishing Ltd, 1982 (2) All ER 555 (CA), the English Court of Appeals was required to consider whether a statutory charge on the property under the General Rate Act would have priority over a legal mortgage on the property existing when the charge came into being. It was argued that the charge would be only on the mortgagor-owner’s interest in the property, i.e. on the equity of redemption. The court negatived this contention. It held that charge on the land imposed for an unpaid surcharge was not confined to a charge on the owner’s interest in the premises when the charge arose, but extended to a charge on all the estates and interests in the premises existing when the charge arose. The rating authority’s charge would have priority over the bank’s interest as a mortgagee.” 13. The rating authority’s charge would have priority over the bank’s interest as a mortgagee.” 13. Particularly Section 11-AAAA states that notwithstanding anything to the contrary contained in any law for the time being in force, any amount of tax, penalty, interest and any other sum, if any, payable by a dealer of any other person under this Act, shall be the first charge on the property of the dealer, or such person. The said section is similar to amended Section 24(2) of Tamil Nadu Act. However, the following observations of their Lordships is also relevant. “Looked at a little differently, the statute has created a first charge on the property of the dealer. What is meant by a ‘first charge’? Does it have precedence over an earlier mortgage? Now, as set out in Dattartreya Shanker Mote ’ s Case, 1974 (2) SCC 799 , 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.” 14. As observed by their Lordships, a charge is a wider term than a mortgage. In other words, it would cover within its ambit a mortgage also. Further, as concluded by their Lordships, first charge is created by operation of law over any property if that charge will have a precedence over an existing mortgage. As rightly contended by the learned Government Advocate even though there is no reference namely “Priority over all other claims” in unamended Section 24(1) of the Tamil Nadu Act, inasmuch as charge is created by operation of law over the properties of a dealer, the said charge will have a precedence over the existing mortgage. 15. By applying the said decision, I hold that in the light of the language used in Section 24(1) unamended Tamil Nadu Act and in view of the fact that the first charge has already been created by operation of law over the properties of the dealer, that charge will have a precedence over the existing mortgage executed in favour of the petitioner’s Bank. 16. 16. In Central Bank of India v. State of Tamil Nadu, 1999 (113) S.T.C. 145 , a Division Bench of this court after referring the decision of the Supreme Court namely S.B.B. & J v. National Iron and Steel Rolling Corpn, 1995 (96) S.T.C. 612, have concluded as follows: “Thus with the above declaration of law by highest court of the land the doubts or controversies or scope for raising any further disputes in this regard must be held to have been set at rest, once and for all and the law so declared is very much binding upon every one in this county.” 17. In the light of unamended Section 24(1) of Tamil Nadu Act and in view of the law laid down by the Apex Court in S.B.B. & J v. National Iron and Steel Rolling Corpn, 1995 (96) S.T.C. 612, the proceedings of the first respondent attaching the immovable property of the second respondent and further action taken by the Commercial Tax Officer for sale of other properties in order to recover the tax arrears are legal since the State has first charge as a result of arrears of tax due by the 2nd respondent for the years from 1975-76 to 1980-81. The contention raised by the petitioner that the mortgage of immovable properties in favour of the petitioner-Bank is earlier to the tax liability of the 2nd respondent and the petitioner- Bank has got a prior charge over the said landed properties cannot be accepted. 18. I also hold, even in the absence of a specific reference as found in the amended sub-clause (2) of Section 24, by virtue of Section (1), the tax dues of the State takes precedence over the Bank’s charge over the landed property which was brought to auction sale. After insertion of sub-section (2) of Section 24, the said position has been made clear. 19. In the light of what is stated above, I do not find any merit in the claim made by the petitioner, consequently, the writ petition fails and the same is dismissed. No costs.