Statutory recovery priority for central sales tax can extend through State machinery, defeating a secured creditor's claim.

Central sales tax assessed and recovered through the State machinery under section 9(2) of the Central Sales Tax Act, 1956 was treated as carrying the State's recovery framework, including the statutory priority given to State sales tax dues. The analysis states that Articles 269 and 286 of the Constitution, together with the CST scheme, support application of the Rajasthan Sales Tax Act, 1994 recovery mechanism, so the revenue's first charge prevails over a secured creditor's claim. The discussion distinguishes crown debt cases on the footing that the issue is whether the CST scheme itself imports the State's statutory charge through the enforcement machinery.

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Issues: Whether the dues payable under the Central Sales Tax Act, 1956 could be treated as a first charge on the dealer's property and given priority over the claim of a secured creditor by reason of section 9(2) of that Act read with the Rajasthan Sales Tax Act, 1994 and the constitutional scheme governing inter-State sales tax.

Analysis: Articles 269 and 286 of the Constitution of India, together with Entries 92A and 92B in List I of the Seventh Schedule, show that Central sales tax is levied in relation to inter-State trade or commerce, but its proceeds are assigned to the States. Under section 9(1) of the Central Sales Tax Act, 1956, levy is by the Union while collection is entrusted to the State authorities, and section 9(2) makes the State machinery for assessment, collection and enforcement applicable as if the tax were payable under the general sales tax law of the State. The Court held that these words are wide enough to carry with them the State's recovery mechanism, including the statutory priority created by section 50 of the Rajasthan Sales Tax Act, 1994. The Court distinguished cases dealing with secured creditors and crown debts on the footing that the present question was whether the CST scheme itself creates a charge through the State recovery framework.

Conclusion: The dues under the Central Sales Tax Act, 1956 enjoy the same priority as State sales tax dues in Rajasthan, and the secured creditor's claim does not prevail over that statutory first charge.

Final Conclusion: The writ petition failed because Central sales tax recoverable in Rajasthan was held to be enforceable with the same priority as State sales tax, leaving the revenue authorities entitled to first appropriation.

Ratio Decidendi: Where a Central tax enactment adopts the State's machinery for assessment, collection and enforcement in substance and design, the State's statutory priority in recovery extends to that Central levy as well.

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