TaxTMI 
TaxTMI 
1997 (9) TMI 570
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.... to be closed down. In order to reopen the mill and for rehabilitation of the workers, the State Legislature enacted the Bhaskar Textile Mills (Acquisition and Transfer) Act, 1986 (Act 4 of 1986) hereinafter referred to as "the Acquisition Act" providing for acquisition and transfer of the Bhaskar Textile Mills Ltd, Jharsuguda. This Act received the assent of the President on March 7, 1986 and, by virtue of sub-section (2) of section 1, came into effect retrospectively from August 13, 1985. Sub-section (1) of section 3 of the Act provides for right of the owner in respect of the textile undertaking, in terms whereof, the right, title and interest of the owner in relation to the textile undertaking stood transferred and vested absolutely in ....
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...."4(1). The textile undertaking referred to in section 3 shall be deemed to include all assets, rights, leaseholds, powers, authorities and privileges and all property, movable and immovable including lands, buildings, workshops, stores, instruments, machinery and equipment, cash balance, cash in hand, reserve funds, investments and all other rights and interest in, or arising out of such property, as were immediately before the appointed day in the ownership, possession, power or control of the owner of the textile undertaking, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto. ................ 5(1). Every liability of the owner of the textile undertaking i....
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....gories and category II shall have precedence over category III and so on; (b) the claims specified in each category except category III shall rank equally and be paid in full, but if the amount is insufficient to meet such claims in full, they shall abate in equal proportions and be paid accordingly; (c) the liabilities specified in category III shall be discharged subject to the priorities specified in this section, in accordance with the terms of the secured loan and the priority inter se, of such loans; and (d) the question of payment of liability with regard to a matter specified in a succeeding category shall arise if a surplus is left after meeting all the liabilities specified in the immediately preceding category. 19(1) ....
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....rty.-Notwithstanding anything to the contrary contained in any law for the time being in force any amount payable by a dealer under this Act on account of tax, penalty or interest or any amount which a person is required to pay under sub-section (1) of section 13-A or for which he is personally liable to the State Government under sub-section (4) of the said section (or any amount which a person is required to deduct and deposit into the Government treasury under the provisions of section 13-AA) shall be a first charge on the property of the dealer or such person, as the case may be. 19.. Tax payable by transferee of business.-(1) When the ownership of the business of a dealer liable to pay tax under this Act is entirely transferred any ....
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....liability of such owner and should not be enforced either against the State Government or the Corporation. It is further provided that save as otherwise expressly provided in this section or in any other section of this Act, liability in relation to the textile undertaking for any period prior to the date of vesting should not be enforced against the State Government or the Corporation. In other words, the liability incurred by the erstwhile industry remains the liability of the erstwhile owner irrespective of the vesting. Admittedly what is due to the Revenue towards arrear of tax is a sum of Rs. 27,018 for the period 1980-81, (O.S.T.) Act, Rs. 58,593 for the period 1982-83 against O.S.T. Act and a sum of Rs. 14,04,365 for the period 1982-....
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....ion 5 of the Acquisition Act. It accordingly follows that the provisions of the Acquisition Act shall override the provisions contained in section 19 of the O.S.T. Act. 8.. However, we should not be understood to mean that under no circumstances the statutory dues payable by the erstwhile owner up to the date of vesting cannot be recovered from the petitioner, for this will be contrary to the provisions contained in the Acquisition Act itself. The said Act provides for appointment of a Commissioner of Payments who can be approached by any person having a claim against the owner of the textile undertaking up to the date of vesting. Section 18 of the Acquisition Act provides the manner in which different claims specified in the Schedule sh....