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TMI Blog1958 (8) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... eferential claim under sub-section (1)(a) of section 530 of the Indian Companies Act, 1956. He has expressed the opinion that the entire claim of the department oug00ht to be treated as an ordinary debt due to a creditor from the company and to be included in the creditors' list but not as a preferential claim. The Superintendent of Commercial Taxes, Patna Urban Circle, has, on the other hand, filed an application supported by an affidavit. In this application, he has stated that the official liquidator has taken a view which is erroneous in law, that a sum of Rs. 9,809-13-0 became due and payable within 12 months next before the relevant date, i.e., the 25th September, 1956, and hence this amount should be treated as preferential claim. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33 0 0 348 0 0 584 1 0 Total 7934 1 0 The question at this stage is whether this Court should direct the payment of the dues of the department amounting to Rs. 7,934-1-0 as preferential claim. Mr. Varma has argued that an amount becomes due and payable to the sales tax department only when it is ascertained, Page No: 580 quantified and notified. He has relied upon the decision in In the matter of Recols (India) Ltd.[1953] 4 S.T.C. 271; 57 C.W.N. 468. in support of his contention. His submission is that the final demand notice for the balance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the Companies Act of 1956, (hereinafter called the new Act) and Companies Act of 1913 (hereinafter called the old Act). The equivalent provision in the old Act is to be found in section 230. Under sub-section (5) of that section, the date to be taken into consideration, i.e., the material date, was the date of the winding up order in a case where an order for compulsory winding up was passed and no voluntary winding up had commenced previously. It is manifest from section 530 (1) (a) of the new Act that a claim has to be paid in priority to other debts if(i) the claim was due on the relevant date, and (ii) the claim became "due and payable" within a period of twleve months next before the relevant date. Mr. Shreenath Singh has not di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther sales as directed by the State Government when computing the taxable turnover and it further provides for a rebate of 2 per cent on the balance left. Section 6 empowers the State Government to exempt sale of any goods from liability to tax. Under section 17, the State Government can exempt any dealer from payment of sales tax. Section 8 states that the State Government may prescribe the points in the series of sales by successive dealers at which taxation can be made. A perual of sections 4 to 8 makes it clear that a dealer may easily compute the tax which he is liable to pay for any sale as soon as he makes it. Section 12 of the Sales Tax Act provides for submission of returns and revised returns by a dealer. Under rule 22 of the rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amounts. I do not, therefore, think that the liability to pay sales tax arises either at the preparation of the return or the passing of the assessment order. It is clear from the reasons which I have given above that sales tax becomes due for each transaction of sale immediately after the sale is effected. In In the matter of Recols (India) Ltd.[1953] 4 S.T.C. 271; 57 C.W.N. 468., Chakravartti, C.J., does not appear to have interpreted the words "due" and "payable" separately. But Sinha, J., interpreted the two words separately. The provisions of the Bengal Finance (Sales Tax) Act, 1941, were under consideration in that case but it appears that those provisions were somewhat similar to the provisions of the Act under consideration in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner as provided for in sub-section (4) of section 14. With great respect, therefore, I am of opinion that Chakravartti, C.J., has rightly said in Recol's case(1) that the tax becomes payable "when it has been ascertained, quantified and notified to the assessee, with a demand for payment..." Sinha, J., who has delivered a separate judgment has agreed with Chakravartti, C.J., on this point. I may also add that Mr. Shreenath Singh has conceded that the tax for the three years in question became payable on the dates given in the column of the "final demand notice" in the extract from the statement which I have quoted above. Mr. Shreenath Singh has contended that the amount of Rs. 7,934-1-0 due to the sales tax department is not e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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