(1) Notwithstanding anything to the contrary, contained in any law for the time being in

force and subject to the provisions of section 530 of the Companies Act, 1956 (No.1 of

1956), any amount of tax and/ or penalty or interest, if any, payable by a dealer or other

person under this Act shall be first charge on the property of the dealer or such person.

(2) Notwithstanding anything contained in this Act, where a dealer or person is in

default or is deemed to be in default under clause (a) of sub-section (11) of section

24 and whose property is being sold by a bank or financial institution for recovery of

its loan, the Commissioner may forgo the right of first charge as mentioned in subsection

(1) against the property sold on the following conditions:-

(a) if the arrears of tax, penalty, interest or part thereof or any other amounts is

up to 25 percent of the total auction value, the arrears shall be paid in full by the

bank or financial institution ;

(b) if the arrears of tax, penalty, interest or part thereof or any other amount is

more than 25 percent of the total auction value, the 25 percent of the total

auction value and the amount in the same proportion of the remaining auction

value as the remaining arrears bear to the total dues of the bank or financial

institution, shall be paid by the bank or financial institution.