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TMI Blog1967 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... bad. On the application of the first respondent an order for interim injunction was passed in respect of certain properties belonging to the second respondent. The Court had ordered the second respondent to furnish security for the amount of the decree which may be passed against the firm in the suit. On April 28, 1955, Jogilal Mulchand, one of the partners of the second respondent, furnished security by creating a charge on his immovable property, which was a house at Aurangabad. After the security bond was furnished, the attachment was released. The security bond furnished by Jogilal Mulchand read as follows: "I, the defendant No. 2 therefore stand as a surety and declare that If the Honourable Court decides the suit against the defendants, he will abide by every order passed by the Court and if he fails to do so, then I defendant No. 2 stand as surety to the extent of Rs. 20,000 (Rupees twenty thousand) in O.S. coins and declare that I shall pay the amount of security into Court and for fulfilling the same I create a charge on my one pucca two storeyed house possessed by me known as 'Chandi Posh' bearing No. 167 situate at Kasba and Taluka Vijapur, District Aurangabad, of the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une 22, 1960, held that in view of the provisions contained in sections 104 and 119 of the Hyderabad Land Revenue Act the Government was entitled to priority for the arrears of sales tax due from the second respondent over the claim of the first respondent. The learned Judge accordingly dismissed the first appeal. From the judgment of Naik, J., the first respondent took the matter in appeal under the Letters Patent. A Division Bench consisting of Patel and K.K. Desai, JJ., allowed the appeal by their judgment dated December 17, 1962, holding that section 119 of the Hyderabad Land Revenue Act applied only to property which was in the custody and possession of the judgment-debtor and not in the custody or possession of a Court. It was observed by the Division Bench that the provisions of the Hyderabad Land Revenue Act contained in sections 104, 116, 117 and 144 made it abundantly clear that the priority applied only in respect of land revenue and not in respect of other taxes. It was further held that the first respondent as a decree- holder had a prior charge as the quality of his debt was not the same as that of the debt due to the Government and therefore in respect of the sales t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty" and such distraint shall be made by officers or clerks appointed by him for this work. The language of the section is general and there is no reason why any restriction should be put on the power of distraint conferred upon the Tahsildar with regard to the defaulter's movable property. In the present-case, the collector of Aurangabad sent the order of distraint to the Subordinate Judge requesting him to remit to the Sales Tax Officer the amount of Rs. 9,672 out of the amount of sale proceeds deposited in his Court. We are of the opinion that the procedure followed by the Collector is justified by the provisions of section 119 and there is nothing in the language or context of the section which prohibits the Collector from making an order of distraint with regard to the movable property in the custody and possession of a Court. We accordingly reject the argument of respondent No. 1 on this aspect of the case. We proceed to consider the next question arising in this appeal, viz., whether the debt due to the Government in respect of arrears of sales tax has priority over the dues of respondent No. 1. It appears that the sales tax was due for the years 1950-51 to 1955-56, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 116 applies and not the substantive law of priority under section 104 of the Land Revenue Act. In our opinion, counsel for the appellants has not been able to make good his argument on this aspect of the case. We pass on to consider the next question arising in this case, namely, whether the appellants are entitled to claim priority towards payment of sales tax according to the common law doctrine of "priority of Crown debts" quite apart from the provisions of the Hyderabad Land Revenue Act. The common law doctrine was evolved in the English law as part of the Crown prerogative which is described by Halsbury Halsbury's Laws of England, 3rd Edn., Vol. 7, page 221. as follows: "The royal prerogative may be defined as being that pre-eminence which the Sovereign enjoys over and above all other persons by virtue of the common law, but out of its ordinary course, in right of her regal dignity, and comprehends all the special dignities, liberties, privileges, powers and royalties allowed by the common law to the Crown of England." The question about the applicability of the priority of Crown debts was considered by the Bombay High Court in 1868 in Secretary of State in Council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Legal Affairs, West Bengal v. The Corporation of Calcutta Criminal Appeal No. 193 of 1964 decided on 7-12-1966., in which it was held that the rule of English common law that the State was not bound by the provisions of a statute unless it was expressly named or brought in by necessary implication, was not accepted as a rule of construction throughout India and therefore it has not become law of the land. It was further held that even on the assumption that it was accepted as a rule of construction throughout India, it was only a rule of construction and not a rule of substantive law and therefore cannot be said to be "a law in force" within the meaning of Article 372. Lastly, this Court expressed the view that the rule of construction was incongruous in a democratic republic and it was inconsistent with the rule of law based on the doctrine of equality and therefore the said canon of construction should not be applied for construing statutes in India. In our opinion, there is nothing in this judgment which affects the authority of the previous decision of this Court in Builders Supply Corporation v. Union of India [1965] 56 I.T.R. 91.. On the other hand, the majority judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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