Statutory tax charge prevails over bank security interest, reaffirming priority of sales tax dues in recovery disputes.

A statutory charge for sales tax dues under the Orissa sales tax law was held to prevail over a mortgage or other security interest created in favour of a bank. The Court treated the issue as settled by earlier decisions on analogous sales tax provisions, and relied on the principle that a statutory charge for tax recovery takes priority over private security interests. On that basis, the sales tax dues ranked ahead of the bank's mortgage and the appeal failed.

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Issues: Whether the statutory charge for sales tax dues under the Orissa sales tax law had priority over the mortgage or security interest created in favour of the bank.

Analysis: The Court treated the question as settled by earlier decisions interpreting analogous provisions. It noted that a statutory charge created for recovery of sales tax dues prevails over a mortgage or other charge created in favour of a bank, and that the same principle had been applied under similar sales tax enactments in other States.

Conclusion: The sales tax dues had priority over the bank's mortgage and the appeal failed.

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