Special acquisition law overrides general tax recovery rules for pre-vesting dues of a transferred textile undertaking.

A special acquisition statute transferring a textile undertaking to the State and then the Corporation governed recovery of pre-vesting sales tax dues, because it preserved such liabilities against the erstwhile owner and not against the State or the transferee. The Act also created an exclusive claims process through the Commissioner of Payments, with a statutory priority scheme and overriding effect over inconsistent laws. General recovery powers under the sales tax law for transferees therefore had to yield to the special enactment. Pre-vesting government dues could be recovered only through that priority mechanism and only to the extent of any balance remaining after higher-ranked claims were satisfied.

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Issues: Whether the attachment of the petitioner-company's bank account for recovery of arrear sales tax dues of the erstwhile textile mill could be sustained after the mill stood vested under the Bhaskar Textile Mills (Acquisition and Transfer) Act, 1986, and whether the special acquisition statute prevailed over the general recovery provisions of the Orissa Sales Tax Act, 1947.

Analysis: The Acquisition Act transferred the textile undertaking to the State Government and then to the Corporation, while section 5(1) made every liability of the owner for any period prior to the appointed day enforceable against the owner and not against the State Government or the Corporation. The Act also created a separate machinery for claims through the Commissioner of Payments and prescribed a statutory order of priorities under section 18 and the Schedule. Section 24 gave the Act overriding effect over inconsistent laws. Although section 19 of the Orissa Sales Tax Act, 1947 permits recovery from a transferee in ordinary cases, that general provision had to yield to the special acquisition enactment. The Court further held that the Government's statutory dues for the pre-vesting period could be recovered only in accordance with the priority scheme under the Acquisition Act and only to the extent of any balance available after satisfying higher-ranked claims.

Conclusion: The attachment was not sustainable and was quashed; the liability for pre-vesting dues could not be fastened directly on the petitioner outside the mechanism and priorities under the Acquisition Act.

Ratio Decidendi: Where a special acquisition statute expressly transfers the undertaking, preserves pre-vesting liabilities against the erstwhile owner, and contains an overriding priority-based claims mechanism, those provisions prevail over the general tax recovery provisions applicable to transferees.

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