Workmen's dues take priority over State sales tax claims under competing statutory charge provisions.

Section 529-A of the Companies Act, 1956, being a Central provision with a non obstante clause, gives statutory priority to workmen's dues in winding up. Although Section 38-C of the Bombay Sales Tax Act, 1959 creates a first charge for sales tax dues, that charge operates subject to any Central Act creating a first charge. The Central priority for workmen therefore prevails over the State sales tax claim, and the workers' dues rank ahead of the State's dues.

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Issues: Whether the workers' dues under Section 529-A of the Companies Act, 1956 had priority over the State's sales tax dues under Section 38-C of the Bombay Sales Tax Act, 1959.

Analysis: Section 529-A of the Companies Act, 1956 is a Central enactment and contains a non obstante clause giving priority to workmen's dues in winding up proceedings. Section 38-C of the Bombay Sales Tax Act, 1959 also creates a first charge, but its operation is subject to any other provision of a Central Act by which a first charge is created. The subsequent Central legislation therefore overrides the State provision, and the statutory priority given to workmen's dues prevails over the sales tax claim.

Conclusion: The workers' dues had priority over the State's sales tax dues, and the challenge to that conclusion failed.

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