Karnataka High Court: SARFAESI Charge Created Earlier Has Priority Over Subsequent GST Charge

The Karnataka High Court has ruled that a SARFAESI charge created earlier in time prevails over a subsequently created GST charge.

Justice Suraj Govindaraj clarified that the priority of charges under the SARFAESI Act, 2002 and the GST Act must be determined based on the chronological order in which they were created.

The Court further held that if a claim arises solely under the Insolvency and Bankruptcy Code (IBC) without overlapping claims under the SARFAESI, RDB, or GST Acts, such a claim can proceed without interference.

The decision reinforces that temporal precedence is the key factor in resolving conflicts between financial statutes.

[Canara Bank v. State of Karnataka]