(1) Notwithstanding anything to the contrary, contained in any law for the time being in force 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 sub-section (1) against the property sold on the following conditions:-

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