COMMISSION COMMERCIAL TAX Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This appeal has been directed against the order of the Official Liquidator wherein the present appellant (Commercial Tax, Government of M.P- hereinafter referred to as the appellant) has been ranked as a preferential creditor. His submission is that in terms of the provisions of 33-C of the Madhya Pradesh General Sales Tax Act, 1958 and Section 53 of the M.P. Commercial Tax Act, 1994, any amount of tax/penalty/interest payable by a dealer or other person under this Act shall be first charge on the property of the dealer or such person and as such he be treated pari pasu with the secured creditors.

(2.) The claim of the appellant is in the sum of Rs.1,40,60,422/-; they are sale tax, central tax and entry tax dues payable by the company (in liquidation) for its Morena Unit and Gwalior Unit. The appellant is aggrieved by the finding returned by the Official Liquidator that he be ranked as a preferential creditor and not a secured creditor. Attention has been drawn to Section 33-C of the Madhya Pradesh General Sales Tax Act, 1958 as also Section 53 of the M.P. Commercial Tax Act, 1994. A perusal of Section 53 of the M.P. Commercial Tax Act 1994 shows that this provision is subject to the provisions of Section 530 of the Companies Act. Section 530 of the Companies Act deals with the claims of revenue taxes, cesses and rates due from the company to the Central/State Government or to a local authority at the relevant date. Learned counsel for the appellant points out that although admittedly the Act of 1958 as also the Act of 1994 have been repealed but they have now been replaced with M.P. Vat Act of 2002; Section 33 has been highlighted. Section 33 also speaks of the provisions of this Act being subject to the provisions of Section 530 of the Companies Act. At this stage, learned counsel for the appellant has filed on record a Notification dated 06.08.2011; submission being that in Section 33 of the Act of 2002, the words 'subject to the provisions of Section 530 of the Companies Act' stand deleted. Submission being qualified by the argument that the provisions of M.P. Vat Act, 2002 clearly envisages the liability of tax to be the first charge and which is not subject to any other provision; as such, the Official Liquidator ranking the appellant in the category of a preferential creditor has committed a folly which order is liable to be set aside.

(3.) Arguments have been countered.