SWAMIKKANNU, J.


This petition is for the issue of a writ of mandamus directing the first respondent, the Assistant Commissioner (Commercial Taxes), Zone III, Madras-1, to forbear from selling the properties of the second respondent herein in pursuance of the notice of sale of movable property in form 3, Ref. No. 6281/81-C dated 25th April, 1981.


2. It is, inter alia, contended in the affidavit filed in support of the writ petition and sworn to by the manager of the petitioner-bank, that the second respondent-firm had been enjoying certain facilities from the petitioner-bank. On 11th July, 1974 the second respondent was granted an open cash credit facility to the tune of Rs. 50, 000 on hypothecation of its stock-in-trade, etc., in favour of the bank, thereby creating a charge over the said goods in favour of the petitioner-bank. The said hypothecation is still in force. The second respondent had left certain arrears of sales tax due to the Government for the assessment years 1978-79 to 1980-81. The first respondent issued a distraint order on 8th December, 1980 demanding immediate payment of a sum of Rs. 78, 739 being the arrears of sales tax, surcharge and advance tax for the said assessment years due from the second respondent-company. Non-payment of the said arrears by the second respondent resulted in the first respondent effecting attachment of the movable properties of the second respondent which had earlier been hypothecated by the second respondent in favour of the petitioner-bank, as early as on 11th July, 1974. On coming to know of the attachment of the hypothecated movables, the petitioner addressed the Deputy Commercial Tax Officer, Sowcarpet Circle, to release the attachment as the properties had been hypothecated to the bank earlier. Not only did the officer not send any reply to the said letter, but, the first respondent issued in form No. 3, a notice of sale of movable property on 25th April, 1981. According to the petitioner-bank, the first respondent is not entitled to sell the goods as the petitioner-bank has a first charge over the same by virtue of the hypothecation in its favour.


3. In the counter-affidavit, the first respondent averred that the second respondent-company is in arrears of sales tax, surcharge, additional tax and Central sales tax to the tune of Rs. 82, 453.36 for the three assessment years aforesaid and that in spite of several personal contacts for clearance of the arrears, the second respondent was postponing payment on some pretext or other and when matters came to a crucial stage, the second respondent moved the Government and obtained permission in G.O. Rt. No. 254 dated 4th August, 1981 to pay 20 per cent of the arrears in the first instance and the balance in subsequent instalments and even then, it failed to fulfil the several conditions of the Government order regarding payment of the current dues regularly. The second respondent had not even paid the tax due to be paid in the month of February, 1981, due to be paid on 20th March, 1981. The Deputy Commercial Tax Officer therefore took steps to proceed against the second respondent for recovery of arrears under the provisions of the Revenue Recovery Act by issuing notice in form 1 for the entire arrears of tax and distrained the movables that were available in the place of business of the second respondent, and fixed the date of sale as 28th May, 1981. It is this sale notice that is impugned by the petitioner-bank in this writ petition by seeking a writ of mandamus directing the first respondent to forbear from proceeding with the sale of the goods attached.


4. The point for consideration is whether there are any grounds for granting a prayer of the petitioner-bank.


5. The sale notice was issued on 25th April, 1981 and the same is in accordance with the provisions of the Revenue Recovery Act. The hypothecation in favour of the bank is not a secured debt which could be treated in preference to the Government dues that can be recovered as a prior charge if t

he goods hypothecated are available for being proceeded against and attached for tax arrears. 6. On a careful and anxious consideration of the arguments advanced on either side, it is seen that there are no grounds for granting the relief prayed for in the writ petition. There being no merit in the writ petition, the same is dismissed. Under the circumstances, there will be no order as to costs. Writ petition dismissed.