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TMI Blog2014 (8) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... ues payable under the said Act. While section 26B of the Kerala General Sales Tax Act enables the State to ignore the transactions in respect of the properties of the dealer after the dues under the said Act became due, section 26A of the said Act enables the State to ignore the transactions in respect of the properties of the dealer from the date of commencement of the proceedings for determination of the dues under the said Act. As such, like section 26B of the Kerala General Sales Tax Act, section 26A of the said Act also cannot prevail, when it comes into collision with the mandates of section 529A of the Companies Act. The petitioner, in the circumstances, is entitled to succeed. Exhibit P10 communication of the third respondent is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ird respondent is not issuing the said certificates. Instead, the third respondent has issued exhibit P10 communication, stating that revenue recovery proceedings were pending against the company in liquidation for recovery of its sales tax dues when the property was purchased by the petitioner and therefore, the validity of the transaction in favour of the petitioner need to be examined before the certificates sought for by the petitioner are issued. Petitioner is challenging exhibit P10 communication in this writ petition. They are also seeking a direction to the respondents to issue the certificates sought for by them. 3. A counter-affidavit has been filed by respondents 2 and 3. It is stated in the counter-affidavit that certificates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales tax dues are to be recovered by the State from the sale proceeds in accordance with the provisions in section 529A of the Act. He has also contended that section 26A of the Kerala General Sales Tax Act cannot prevail when it comes into collision with the mandates of section 529A of the Act. The learned counsel has relied on the decision of the Division Bench of this court in Assistant Commissioner (Assessment) v. Official Liquidator, High Court of Kerala [2014] 72 VST 114 (Ker); [2014] 185 Comp Cas 21 (Ker); [2014] 1 KLT 325, in support of his contention. 6. The facts dealt with in the decision referred to above are identical to the facts of the case in hand. The decision was rendered in a case where a similarly placed purchaser of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 529A read with section 530 and section 26B must indeed pale into inefficacy and insignificance. They cannot stand together. If they are allowed to stand together, then necessarily there is irreconcilable conflict and that conflict can only be resolved in favour of the parliamentary legislation. The resultant position is that, as Parliament has declared that in the case of a company which is being wound up, proceeds of its assets must ensure firstly to the secured creditors and workers and it is to be distributed pari passu among them and then, if any proceeds remain, it is to be distributed among others including the State which may be creditors with unsatisfied demands following assessments which have been made under the Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kers. If the sale is held free of encumbrances and if the State is allowed to pursue its claim as against the property, it would naturally bring the sale under a cloud and there would be no end to the litigation which would in the ultimate analysis be not only against the interests of persons whose interests are sought to be secured by the Companies Act on the basis of priority, but against the scheme of the Companies Act. . . 7. The reasons given by the Division Bench for the conclusion arrived at in that case, squarely apply to the facts of this case, as the distinction on facts is only that in the present case, the provision in section 26A of the Kerala General Sales Tax Act is set up as a defence, whereas in the case referred to abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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