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TMI Blog2007 (4) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the State of Kerala towards sales tax over the claims made by the bank on the strength of the mortgages created by the donees in their favour. The right of the State Government to get priority in the matter of recovery of sales tax from the defaulters over equitable mortgages created by them in favour of banks and financial institutions is no more res integra. Dealing with the provisions parallel to section 26B of the Kerala General Sales Tax Act, 1963 by the various sales tax laws of other States, the Supreme Court has already recognised the statutory first charge in respect of sales tax arrears. Reference may be made to the decisions of the apex court in State Bank of Bikaner & Jaipur v. National Iron & Steel Rolling Corporation [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Legislature is competent to enact such provision in exercise of its legislative power under entry 54 of List II of the Seventh Schedule read with article 246 of the Constitution of India. Section 26A does not restrict or purport to impose any restriction on any freedom of trade by the citizen of the country, but only to safeguard public interest. Apart from the provisions of section 26A, there are provisions in Revenue Recovery Act itself to proceed against the transfer of property to defeat the claim for tax arrears." Senior Counsel appearing for the appellant, Shri Pathrose Matthai, submitted that in the above-mentioned case this court has not considered the overriding effect of the RDB Act over the Kerala General Sales Tax Act. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Council of India v. State of Karnataka [1998] 6 SCC 131. Sri P. V. Surendranath, counsel appearing for the appellant in W.A. No. 259 of 2007, has also adopted the same argument and referred to the decision of the apex court in Allahabad Bank v. Canara Bank [2000] 4 SCC 406 and submitted that the principle laid down by the apex court upholding the overriding effect in the RDB Act vis-a-vis the Companies Act would squarely apply to this case. Counsel referred to section 34 of the RDB Act and submitted that the provisions of the said Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in any instrument having effect by virtue of any law other than the RDB Act. Sri V. V. Asokan, Senior Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act. The RDB Act is enacted by Parliament in exercise of the legislative powers conferred on it under entry 45 of List I of the Constitution of India and the Kerala General Sales Tax Act, 1963 was enacted by the State Legislature in exercise of the powers conferred on it under entry 54, List II of the Seventh Schedule. In Allahabad Bank's case [2000] 4 SCC 406 it has been held that the RDB Act has been enacted for speedy recovery of the amount due to the banks and financial institutions. The intention of enacting RDB Act is not to give any precedence to the dues to the banks and financial institutions. The RDB Act provides for expeditious adjudication and recovery of debts due to banks and financial institutions without following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Bombay Sales Tax Act. We are informed that the above judgment was taken up in appeal before the apex court in S.L.P. No. 8910 of 2006 and the same is pending. The judgment of this court in Rajmohan's case [2005] 142 STC 283; [2005] 2 KLT 131 is also pending consideration before the apex court. The constitutional validity of section 26A and section 26B has already been upheld by this court. We are in full agreement with the principle laid down by the Bombay High Court in Thane Janata Sahakari Bank's case [2006] 148 STC 32; [2006] 132 Comp Cas 823 (Bom). In such circumstances we find no reason to grant the reliefs prayed for in these appeals. Counsel appearing for the appellant in W.A. No. 259 of 2007 referred to the interim o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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