This section establishes that any taxes, interest, or penalties owed to the government by a taxable person or any other individual will take priority over other claims on their property. This means that, in general, these tax-related debts must be settled before any other debts or claims, ensuring the government is paid first. However, there is an exception to this rule as provided in the Insolvency and Bankruptcy Code, 2016, which may alter the order of priority in certain situations involving insolvency or bankruptcy. Essentially, this section ensures that government tax claims are prioritized over other liabilities, except where specific insolvency laws apply.
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82. Tax to be first charge on property
Notwithstanding anything to the contrary contained in any law for the time being in force, save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, any amount payable by a taxable person or any other person on account of tax, interest or penalty which he is liable to pay to the Government shall be a first charge on the property of such taxable person or such person.
