TMI Blog2008 (9) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... e quashed. - 1385 of 2008 - - - Dated:- 11-9-2008 - Adarsh Kumar Goel and Ajay Tewari, JJ. Shri Jagmohan Bansal, Advocate, for the Petitioner. Ms. Anjali Kakkar, Advocate, for the Respondent. [Order per : Ajay Tewari, J.]. - The writ petition has been filed challenging the letters dated 31-10-2007 and 4-1-2008 whereby respondent No. 3 asked the petitioner to pay the outstanding excise duty of Rs. 990.36 lacs of M/s. Euro Cotspin Ltd. (for short "ECL"), in terms of the provisions of Section 11 of the Central Excise Act, 1944 (for short "the Act") read with Section 142 of the Customs Act. 2. E.C.L. was a defaulter of various financial institutions which ultimately authorized one of them i.e. Punjab National Bank to sell the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em." 5. Thereafter, in State of Karnatka and another v. Shreyas Papers Pvt. Ltd. others reported as JT 2006 (1) SC 180, the Hon'ble Supreme Court stated the following questions:- "1.1 Firstly, whether the purchaser of assets of a concerns old by a State Financial Corporation, in exercise of its powers under Section 29 of the State Financial Corporations Act, 1951 (hereinafter "the SFC Act) would be liable under the Karnataka Sales Tax, 1957 (hereinafter "the KST Act"), for the arrears of sales tax of the concern whose assets have been transferred? 1.2 Secondly, under what circumstances does a charge created on a property become unenforceable against a transfree of such a property?" The Hon'ble Court held as follows - "In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act in Dena Bank v. Bhikhabhai Prabhudas Parekh Co. (2000) 5 SCC 694; (2001 CLC 118). As explained in the case of Constitution bench Judgment in Builders Supply Corporation v. Union of India (AIR 1965 SC 1061), the arrears of tax due to the State can claim priority over private debts and thus the rule of common law amounts to law in force in the territory of British India at the relevant time within the meaning of Article 372(1) of the Constitution of India and therefore continues to be in force thereafter. In Dena Bank case (cited supra) it is held that the Crown's preferential right to recover all debts over other creditors is confined to ordinary and unsecured creditors. In the light of the above discussion, we conclude:- "(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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