JUDGMENT
D.V. Sehgal, J.
1. This judgment shall dispose of C. W. P. Nos. 730 and 1293 of 1986 filed by M/s. Hindustan Vegetable Oils Corporation Ltd., a Government company. Both the petitions involve the same questions of law and fact and are, therefore being disposed of through one and the same judgment.
2. The facts in brief are that Amritsar Sugar Mills Co. Ltd. had a unit for the purpose of manufacture of vegetable oil products known by the name of Amritsar Oil Works Ltd., Amritsar. The Central Government in the exercise of the powers conferred under Sub-section (1) of Section 18AA of the Industries (Development and Regulation) Act, 1951, took over the management of the Amritsar Oil Works vide notification dated 13th September, 1974 and appointed a Board of Directors to manage the same. The Amritsar Oil Works was a dealer under the Punjab General Sales Tax Act, 1948 and was being assessed as such. For the assessment year 1976-77 ending 3lst March, 1977 sales tax liability to the tune of Rs. 6,49,377 was created. Similarly, for the assessment years 1977-78 and 1978-79 sales tax liabilities to the tune of Rs. 7,62,966 and Rs. 12,53,861 respectively were created. The demand notices issued for payment of these amounts are annexures P.3, P.4 and P.5 respectively annexed to C. W. P. No. 730 of 1986.. For the assessment year 1969-70 liability to the tune of Rs. 1,30,680 and for the assessment year 1970-71 liability to the tune of Rs. 2,91,900 were created and the demand for the total amount of Rs. 4,22,580 in respect of these two assessment years was made through demand notice, annexure P.3 annexed to C. W. P. No. 1293 of 1986. Later, a recovery certificate dated 3rd May, 1986, annexure P.6, for a sum of Rs. 20,16,827 in respect of the first three demands was issued by the Assistant Collector, 1st Grade, Amritsar, so as to recover this amount as arrears of land revenue. The petitioner was required to appear and make the payment of this amount. It was further mentioned that in the event of non-compliance warrants of arrest or attachment shall be issued. Through the present writ petitions, it is submitted that the petitioner as a Government company is not liable to pay the aforesaid amounts of arrears of sales tax–a liability incurred by Amritsar Oil Works.
3. It is necessary to note certain facts. On 19th October, 1982, the Amritsar Oil Works (Acquisition and Transfer of Undertakings) Act, 1982 (for short “the Act”), came into force. Section 3 of the Act provides that on the appointed day the Amritsar Oil Works and the right, title and interest of the Amritsar Sugar Mills Company in relation to it stood transferred and vested in the Central Government. Section 2(c) provides that the appointed day means the date of commencement of the Act, which means the date on which the Act was published in the Government of India Gazette, i.e., 19th October, 1982. Section 2(i) lays down that “the Government company” means the Government company in which the Amritsar Oil Works are directed to vest under Sub-section (1) of Section 5. Notification annexure P.I was issued by the Central Government on 23rd April, 1984 under Section 5(1) of the Act to the effect that the property of the Amritsar Oil Works vests in the petitioner. Section 2(e) defines the words “date of taking over” to mean the date on which the management of the Amritsar Oil Works of the Amritsar Sugar Mills Company was taken over by the Board of Management by virtue of the order of the Government of India dated 13th September, 1974, annexure P.2. It is educative to reproduce some of the provisions of the Act which have a direct bearing on adjudication of the dispute involved in the present petitions. These are Sections 6, 7, 14, 16, 17 and 21, which are to the following effect :
Section 6. The Amritsar Sugar Mills Company to be liable for certain prior liabilities.-(1) Every liability, other than the liability specified under Sub-section (2), of the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works in respect of any period prior to the appointed day shall be the liability of the Amritsar Sugar Mills Company and shall be enforceable against it and not against the Central Government or where the Amritsar Oil Works vest in a Government company, against the Government company.
(2) Any liability in respect of the amount advanced after the date of taking over of the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works together with interest due thereon and the wages, salaries and other dues of persons employed in the Amritsar Oil Works in respect of any period after the date of taking over shall, on and from the appointed day, be the liability of the Central Government and shall be discharged by the Central Government or, for and on behalf of that Government, by the Government company as and when repayment of such amount becomes due or as and when such wages, salaries and other dues become due and payable.
(3) For the removal of doubts, it is hereby declared that-
(a) save as otherwise expressly provided in this section or in any other section of this Act, no liability, other than the liability specified in Sub-section (2), of the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works in respect of a period prior to the appointed day shall be enforceable against the Central-Government or the Government company, as the case may be;
(b) no award, decree or order of any court, tribunal or other authority in relation to the Amritsar Oil Works, passed after the appointed day, in respect of any matter, claim or dispute in relation to any matter, not being a matter referred to in Sub-section (2), which arose before that date shall be enforceable against the Central Government or the Government company, as the case may be;
(c) no liability incurred by the Amritsar Sugar Mills Company before the appointed day, for the contravention, in relation to the Amritsar Oil Works, of any provision of law for the time being in force, shall be enforceable against the Central Government or the Government company, as the case may be.
Section 7. Payment of amounts.-(1) For the transfer to, and vesting in, the Central Government, under Section 3 of the Amritsar Oil Works and the right, title and interest of the Amritsar Sugar Mills Company in relation to that Works there shall be given by the Central Government to the Amritsar Sugar Mills Company, in cash and in the manner specified in Chapter VI, an amount equal to a sum of sixty-four lakhs, forty-eight thousand, nine hundred and forty-four rupees and sixty-five paise.
(2) In addition to the amount specified in Sub-section (1), there shall also be given to the Amritsar Sugar Mills Company by the Central Government an amount calculated at the rate of ten thousand rupees per annum for the deprivation of the Amritsar Sugar Mills Company of the management of its Amritsar Oil Works for the period commencing on the date of taking over and ending with the appointed day.
(3) The amount specified in Sub-section (1) and the amount calculated in accordance with the provisions of Sub-section (2) shall carry simple interest at the rate of four per cent per annum for the period commencing on the appointed day and ending on the date on which payment of such amount is made by the Central Government to the Commissioner.
Section 14. Appointment of Commissioner of Payments.-(1) The Central Government shall, for the purpose of disbursing the amounts payable under Section 7 to the Amritsar Sugar Mills Company, by notification, appoint a Commissioner of Payments.
(2) The Central Government may appoint such other persons as it may think fit to assist the Commissioner and thereupon the Commissioner may authorise one or more of such persons also to exercise all or any of the powers exercisable by him under this Act, and different persons may be authorised to exercise different powers.
(3) Any person authorised by the Commissioner to exercise any of the powers exercisable by the Commissioner may exercise those powers in the same manner and with the same effect as if they have been conferred on that person directly by this Act and not by way of authorisation.
(4) The salaries and allowances of the Commissioner and other persons appointed under this section shall be defrayed out of the Consolidated Fund of India.
Section 16. Priority in relation to claims.-(1) Every secured debt due from the Amritsar Sugar Mills Company shall have priority over all other debts and shall be paid in accordance with the rights and interests of the secured creditors :
Provided that where the secured debts are due to different creditors by reason of the hypothecation of different assets to them, such debts shall be repaid in full in accordance with the rights and interests of such creditors.
(2) Notwithstanding anything contained in any other law for the time being in force, there shall be paid in priority to all other unsecured debts,-
(a) all revenues, taxes, cesses, rates and any other dues payable immediately before the appointed day, to the Central Government, State Governments, local authorities and State Electricity Boards in relation to the Amritsar Oil Works, as the case may be;
(b) all amounts due in respect of any compensation or liability for compensation under the Workmen’s Compensation Act, 1923, in respect of the death or disablement of any employee of the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works, unless the said company has, under such a contract with insurers as is mentioned in Section 14 of the said Act, rights capable of being transferred to and vested in the workmen;
(c) all sums deducted by the Amritsar Sugar Mills Company from the salary or wages of any employee of the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works for credit to any provident fund or any other fund established for the welfare of the employees but not deposited to the credit of such funds.
(3) The debts specified in Sub-section (2) shall rank equally among themselves and be paid in full, unless the balance of the amount left after meeting the liabilities referred to in Sub-section (1) is insufficient to meet them, in which case they shall abate in equal proportions and be paid accordingly.
Section 17. Claims to be made to the Commissioner.-Every person having a claim against the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works shall prefer such claims before the Commissioner within thirty days from the specified date :
Provided that if the Commissioner is satisfied that the claimant was prevented by sufficient cause from preferring the claims within the said period of thirty days, he may entertain the claim within a further period of thirty days but not thereafter.
Section 21. Act to have overriding effect.-The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any court, tribunal or other authority.
4. The contention of the petitioner is that under Sub-section (2) of Section 6 of the Act any liability in respect of the amount advanced after the date of taking over of the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works with interest due thereon and the wages, salaries and other dues of persons employed in the Amritsar Oil Works is the liability of the Central Government and shall be discharged by the Central Government or, for and on behalf of the Government by the petitioner as and when repayment of such amount becomes due or as and when such wages, salaries and other dues become due and payable. This liability according to the petitioner, therefore, relates to the period from 13th September, 1974 to 19th October, 1982. It has been made clear in Section 6 of the Act that no liability other than that mentioned in Sub-section (2) of the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works in respect of the period prior to 19th October, 1982 shall be enforceable against the Central Government or the petitioner as the case may be. Thus, no award, decree or order of any court, tribunal or other authority in relation to the Amritsar Oil Works passed after the appointed day in respect of any matter, claim or dispute in relation to any matter not being a matter referred to in Sub-section (2), which arose before that date shall be enforceable against the Government or the petitioner as the case may be. Section 7 of the Act provides that for the transfer to and vesting in the Central Government of the Amritsar Oil Works and the right, title and interest of the Amritsar Sugar Mills in relation to that Works shall be given by the Central Government to the Amritsar Sugar Mills Company in cash and in the manner provided in Chapter VI a sum of Rs, 64,48,944.65. On the appointed day, the general superintendence, direction, control, management of the affairs and business of the Amritsar Oil Works vested in the Central Government and since the petitioner-company was brought into being the control vested in it as provided therein. The Central Government appointed a Commissioner of Payments under Section 14 of the Act for the purpose of disbursing the amounts payable under Section 7 to the Amritsar Sugar Mills Company. The amount of Rs. 64,48,944.65 was to be paid in cash to the said Commissioner for payment besides the amount mentioned in Sub-section (2) thereof. The amount so deposited with the Commissioner was meant first to satisfy the claims enumerated in Section 16 of the Act. The first priority was given to the payment of all revenues, taxes, cesses, rates and any other dues payable immediately before 19th October, 1982 to the Central Government, State Governments, local authorities and State Electricity Boards in relation to the said works after satisfying the secured debts of the said works.
5. The contention of the petitioner, therefore, is that whatever amount towards sales tax became payable by the Amritsar Oil Works to the State of Punjab in relation to the period prior to 19th October, 1982 is to be paid by the Commissioner of Payments in priority to all other unsecured debts under Section 16(2)(a) of the Act out of the amount deposited with him by the Central Government in pursuance of Sections 7 and 15 of the Act. The amount of arrears of sales tax and penalties sought to be recovered through the impugned demand notices from the petitioner cannot be enforced against it. In fact, by virtue of the provisions of the Act it is not liable to make any such payment. Reliance is also placed on Section 21 of the Act which lays down that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any decree or order of any court, tribunal or other authority. It is, thus, contended that the sales tax authorities of the respondent cannot in contravention of the provisions of the Act enforce this liability against the petitioner.
6. The petitions have been opposed by the respondents by filing written statements in both the petitions. Three preliminary objections have been taken. Firstly, it is contended that the petitioner cannot straightaway invoke the jurisdiction of this Court under Article 226 of the Constitution. Alternative remedy of appeal and revision under the provisions of Sections 20 and 21 of the Punjab General Sales Tax Act, 1948 (for short “the Punjab Act”), is available to the petitioner. Therefore, the present petitions cannot be maintained. Secondly, that appeals filed by the petitioner against the orders of assessment passed by the Assessing Authority are already pending before the statutory appellate authority against the impugned assessments. When these appeals have not been decided finally, the writ petitions cannot be maintained. The last submission is that the petitioner filed a writ petition in the Supreme Court against the impugned levy. Partial stay as regards recovery of penalty was granted. The petitioner was required to pay the amount of sales tax and in case the petitioner was held not liable to pay the same the respondents were required to refund the amount along with interest at the rate of 12 per cent per annum. Thus, the present petitions are not maintainable.
7. In my view, the preliminary objections raised by the learned Advocate-General cannot stand in the way of the petitioner. The statutory remedy provided by the Punjab Act and even the appeals pending before such statutory authority relate only to the quantum of sales tax payable by the Amritsar Oil Works and do not pertain to the liability of the petitioner to make payment of this amount of sales tax. Likewise, the petition pending in the Supreme Court relates to the quantum of sales tax payable. In fact, it has been averred in a rejoinder filed by the petitioner that the said petition pending in the Final Court pertains to the constitutional validity of Section 4B of the Punjab Act and thus there is no impediment caused thereby in the way of the petitioner to seek relief in the form the claim has been made in the present writ petitions.
8. On merits it is contended by the learned Advocate-General that the provisions of the Act cannot override the provisions of the Punjab Act. Levy of sales tax and purchase tax on sale and purchase of goods is a State subject. A Central Act cannot override the provisions of the said Act pertaining to this subject. It is further contended that Section 21 of the Act does not override the provisions of Section 17 of the Punjab Act which makes the following provisions :
Section 17. Transfer of business.-Where the ownership of the business of a registered dealer is entirely transferred and the transferee carries on such business either in its old name or in some other name, the transferee shall for all the purposes of this Act (except for liabilities under this Act already discharged by such dealer) be deemed to be and to have always been registered as if the certificate of registration of such dealer had initially been granted to the transferee; and the transferee shall on application to the prescribed authority be entitled to have the registration certificate amended accordingly.
9. It is, thus, clear that since the ownership of the Amritsar Oil Works stands transferred to the petitioner it is liable to discharge the liability of sales tax, penalty, etc., as a transferee from the said works and the respondents are entitled to recover the amount from it.
10. I have heard the learned counsel for the parties. I am of the considered view that these petitions must succeed. It is evident that from the appointed day, i.e., 19th October, 1982, Amritsar Oil Works vested in the Central Government and it now vests in the petitioner. The Central Government by virtue of the provisions of Section 7 of the Act paid a sum of Rs. 64,48,944.65 for the transfer to and vesting in it of the Amritsar Oil Works and the right, title and interest of the Amritsar Sugar Mills Company in relation to the said works. This amount has been deposited with the Commissioner of Payments under Section 15 of the Act. All the claims of secured creditors are to be satisfied by the Commissioner of Payments out of this amount. Likewise, all other dues of the Amritsar Oil Works in relation to a liability incurred by it prior to the aforesaid appointed day are to be satisfied by the Commissioner of Payments out of the said amount. Sub-section (2) of Section 16 of the Act provides that there shall be paid in priority to all other unsecured debts, all revenues, taxes, cesses, rates and any other dues payable immediately before 19th October, 1982 to the Central Government, State Governments, local authorities and State Electricity Boards in relation to the Amritsar Oil Works. Thus, a specific mode has been provided for recovering the amount of sales tax by the respondents in relation to the liability incurred by the Amritsar Oil Works before the appointed day and they have to approach the Commissioner of Payments for satisfying their demand of sales tax and penalty, etc.
11. The contention of the learned Advocate-General that in view of the provisions of Section 17 of the Punjab Act the amount of sales tax and penalty represented by the impugned demand notices can be recovered from the petitioner being the transferee company of the Amritsar Oil Works is not at all tenable. The contention that Section 21 of the Act cannot override the provisions of Section 17 of the Punjab Act does not hold water. For transfer to and vesting in it of the Amritsar Oil Works the Central Government has deposited the amount with the Commissioner of Payments and a specific provision has been made for satisfying the claim of sales tax due to the respondents out of this amount. The respondents cannot insist on making a demand on the petitioner for those dues disregarding the provisions of the Act. I, therefore, reject this contention of the learned Advocate-General.
12. It is to be noted that the sales tax and penalties which are sought to be recovered through the impugned demand notices pertain to the period prior to the appointed day and there is no dispute whatsoever in this regard. The mere fact that these demands have been created after the appointed day would be wholly immaterial and the demands shall relate back to the relevant period. In Sri Venkateswara Rice, Ginning and Groundnut Oil Mill Contractors Co. v. State of Andhra Pradesh [1971] 28 STC 599 it has been held by the Final Court that the charge in respect of a sale or purchase under the sales tax laws becomes effective as soon as the sale in the case of sales tax and purchase in the case of purchase tax is made, though the liability of the dealer can be computed only at the end of the year. The incurring of the charge is one thing and its computation is a totally different thing. Thus, the liability was incurred by the Amritsar Oil Works as soon as the transactions of sale took place. It is, therefore, clearly a liability pertaining to the period prior to the appointed day and cannot be fastened on the petitioner in view of the provisions of the Act.
13. In view of the above discussion, I allow these writ petitions, quash the demand notices dated 14th January, 1984, 13th December, 1985 and 30th December, 1985 and the recovery certificate dated 3rd May, 1986 (annexure P.6 in C. W. P. No. 730 of 1986) and demand notice dated 26th February, 1986 (annexure P.3 in C. W.P. No. 1293 of 1986) and hold that the respondents shall not be entitled to enforce this liability and recover the amount from the petitioner. The respondents are, however, at liberty to make claim for payment of the amount of sales tax and penalty mentioned in the impugned demand notices with the Commissioner of Payments appointed under Section 14 of the Act.
14. In the circumstances of the case, however, there shall be no order as to costs.