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2010 (3) TMI 1200 - HC - VAT and Sales TaxClaim of the State Government - Entitled to Recover the amount - company under liquidation - HELD THAT:- In our opinion, the learned single Judge clearly erred in holding that though Section 529A of the Companies Act operates, Section 38C of the Sales-tax Act also operates. If Section 529A which is the Central Enactment giving priority to the secured creditors and workers operates in relation to a property of the company, then provisions of Section 38C giving priority to the State Government will not operate in relation to that property. It is further to be seen here that if Section 38C does not operate in relation to a property of the Company because of operation of Section 529A, then by operation of the provisions of the Maharashtra Land Revenue Code, there is no change brought about in the situation. In our opinion, the provisions of Section 169 of the Maharashtra Land Revenue Code makes the position absolutely clear. The above observations make it clear that by operation of Section 529-A, priority is given to the dues of the secured creditors and workers over State first statutory charge. In this view of the matter, therefore, in our opinion, the learned single Judge was not justified in holding that dues of the State Government are recoverable pari pasu with the dues of the Appellant. In the result, therefore, both the Appeals succeed and are allowed. The order of the learned single Judge in Company Application No.540 of 2002 and Company Application No.101 of 2002 is set aside. No order as to costs.
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