Special acquisition statute overrides general tax recovery law; pre-vesting liabilities must be claimed through the Commissioner of Payments.

A special acquisition statute creating an overriding, self-contained mechanism for vesting an undertaking required pre-appointed-day sales tax and penalty liabilities to be pursued through the Commissioner of Payments, not enforced directly against the government company. The court treated those dues as liabilities of the former owner arising before the appointed day, and held that later assessment or recovery notices did not alter their character. It further held that the transferee provision in the general sales tax law could not defeat the special statutory claims process. The recovery notices were quashed, leaving the revenue authorities to pursue payment only under the acquisition statute.

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Issues: Whether sales tax and penalty liabilities arising from the period before the appointed day could be enforced directly against the Government company after vesting of the undertaking, or whether the respondents were confined to seeking payment before the Commissioner of Payments under the special acquisition statute.

Analysis: The undertaking had vested in the Central Government and thereafter in the Government company under the special acquisition statute. That enactment created a complete code for discharge of liabilities of the acquired undertaking. It preserved pre-appointed-day liabilities against the former owner and required claims of revenues, taxes, cesses and other dues payable immediately before the appointed day to be pursued in priority before the Commissioner of Payments. The statute also gave overriding effect to its provisions notwithstanding anything inconsistent in any other law. The sales tax demands related to transactions of the acquired undertaking for a period anterior to the appointed day, and the mere fact that assessment or recovery notices were issued later did not change the character of the liability. The transferee provision in the Punjab sales tax law could not be used to defeat the special mechanism created by the acquisition statute.

Conclusion: The liability could not be enforced directly against the petitioner and had to be pursued only in the manner provided by the special acquisition statute before the Commissioner of Payments.

Final Conclusion: The writ petitions succeeded, the recovery notices were quashed, and the respondents were left to pursue their monetary claims through the statutory claims process under the acquisition law.

Ratio Decidendi: Where a special acquisition statute provides an overriding and self-contained scheme for vesting of an undertaking and for satisfaction of pre-vested liabilities through a designated claims mechanism, those liabilities cannot be recovered directly from the transferee company under a general fiscal law.

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