TaxTMI 
TaxTMI 
1999 (7) TMI 678
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.... on 7.7.1979 to collect the proceeds of the bill from the drawees separately). This act amounts to equitable assignment. If any amount is payable by drawees, the same could be collected by plaintiff directly from them and in default of such payment, plaintiff is entitled to take proceedings without the junction of first defendant. 6th defendant is one of the drawees and on the basis of power of attorney, Plaintiff is entitled to collect the amount from 6th defendant. But it seems that 7th defendant issued a notice under Section 26 of Tamil Nadu General Sales Tax Act, 1959 to pay the amount to it as if there are sales tax arrears from first defendant. The demand notice issued by 7th defendant was for Rs. 71,044.34, higher than the amount due to plaintiff. It is said that since plaintiff has become agent coupled with interest, it has got unqualified power to recover the dues from the amount payable in respect of each of the local bills purchased by plaintiff. In spite of the fact that 6th defendant was brought to the notice of power of attorney, it paid a sum of Rs. 21,000/- out of which total outstanding liability of Rs. 58,916.04 to 7th defendant. This according to plainti....
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....t towards sales tax arrears for the year 1978- 79 and 1979-80 and notice was issued to 6th defendant asking it to pay the amount towards sales tax arrears. It is said that 6th defendant is liable to pay an amount of Rs. 62,098/- towards sales tax as per Ex. B6 notice. It prayed for dismissal of the suit as against it. Along with the suit, three other suits were also jointly tried and trial Court passed decree directing 6th defendant to pay a sum of Rs. 57,044.34 to plaintiff. It further directed defendants 1 to 5 to pay a sum of Rs. 57.044.34. It also found that defendants 1 to 5 are bound to pay a sum of Rs. 21,000/- to plaintiff and in case they do not pay the amount, 6th defendant is liable to pay the sum and in case if such payment 6th defendant is entitled to recover the same from defendants 1 to 5. Cost was also allowed as against defendants 1 to 5 and against 7th defendant, the suit was dismissed. 7th defendant was also allowed to recover the cost from defendants 1 to 5. It is against the said judgment and decree, 6th defendant preferred this appeal. In the various grounds taken in the memorandum of appeal it is contended that State debt is having ....
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....reads thus, ?(1) The assessing authority may, at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the dealer at his last address known to the assessing authority) require- (1) any person from whom money is due or play become due to the dealer or to any person who has become liable to pay any amount due under this Act; or (ii) any person who holds or may subsequently hold money for or an account of the dealer or other person who has become liable to pay any amount due under this Act, to pay the assessing authority either forthwith upon the money becoming due or being held at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the dealer or other person in respect of the arrears that have become payable under this Act or the whole of the money when it is equal to or is less than the arrears aforesaid. Sec. 26(3) - Any person making any payment in compliance with a notice under this section shall be deemed to have made the payment under the authority or the dealer and the receipt of the assessing authority shall constitute a good and suffi....
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.... Bank can be held to be an assignee of the interest in the decree; if so whether that assignment is a legal assignment or an equitable assignment? Their Lordships held that a power of attorney is a power coupled with interest and hence the same is not revocable. Their Lordships further said that the transaction entered into under that document amounts to an equitable assignment of the decree in favour of the Bank to the extent necessary to discharge appellant's debts to the Bank. It is further held that where the agency is created for valuable consideration and authority is given to effectuate a security or to secure interest of the agent, the authority cannot be revoked. Their Lordships further considered the question whether on the terms of Power of attorney a conclusion could be arrived as to whether the assets have been transferred or assigned? Their Lordships said that as per the terms of the document, appellant continues to be the owner of the amount due under the decree and the bank was merely authorised to act as its agent and therefore it is not possible to hold in law that bank was assignee of decree. The interest of appellant under the decree cannot be said ....
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....reated. In 1974(2) S.C.C. 799 ( Dattatreya Shanker Mote v. Anand Chintaman Datar ) their Lordships considered the distinction between a mortgage and charge. In paragraph 7 of the Judgment, after extracting Section 100 of Transfer of Property Act, their Lordships held thus, ?It is apparent from the provisions of the above section that a charge does not amount to a mortgage through all the provisions which apply to a simple mortgage contained in the proceeding provisions shall, so far as may be, apply to such charge, while a charge can be created either by act of parties or operation of law, a mortgage can only be created by act of parties. A charge is thus a wider term as it includes also a mortgage, in that every mortgage is a charge, but every charge is not a mortgage. The Legislature while defining a charge in Section 100 indicated specifically that it does not amount to a mortgage. It may be incongruous and in terms even appear to be an antithesis to say on the one hand that a charge does not amount to a mortgage and yet apply the provisions applicable to a simple mortgage to it as if it has been equated to a simple mortgage both in respect of the nature and efficacy of....
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....t in favour of the mortgagee. THE mortgagor is entitled to redeem his property on payment of the mortgage dues. This does not, however, mean that the property ceases to be the property of the mortgagor . THE title of the property remains with the mortgagor. THErefore, when a statutory first charge is created on the property of the dealer, the property subjected to the first charge is the entire properly of the dealer. THE interest of the mortgagee is not excluded from the first charge. THE first charge, therefore, which is created under Section] 1 -AAAA of the Rajasthan Sales Tax Act will operate on the property as a whole and not only on the equity of redemption as urged by Mr. Tarkunde. 9. We find support for this conclusion in the observation made in Fisher and Lightwood's Law of Mortgage 10th Edn. at page 33 where the statutory charges are discussed. In dealing with a statutory charge in favour of rating authorities in respect of rating surcharges for unused commercial buildings under the General Rate Act, 1967, it is stated that ?a statutory charge has priority to the interest of the mortgagee under a mortgage existing when the charge arose?. In the case of Westminister Ci....
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.... a change under Section 74(1) of the Estate Duty Act cannot, therefore, he construed as creation of an interest in property that is the subject-matter of the charge. The creation of the charge under Section 74(1) only means that in the matter of recovery of estate duty from the property which is the subject matter of the change the amount recoverable by way of estate duty would have priority over other liabilities of the accountable person. In that sense the claim in respect of estate duty would have precedence over the claim of the mortgagee because a mortgage is also a charge, ( see: State Bank of Bikaner & Jaipur v. National Iron & Steel Rolling Corpn. ). The High Court has, therefore, rightly held that as a result of the charge created under Section 74(1) of the Estate Duty Act, it could not be said that title of the assessee to the immovable properties received by him from Smt. Umayal Achi was incomplete and imperfect in any way. In the context of the facts of this case, the High Court has found that the assessee had admittedly become the full owner of the assets even before the payment of estate duty and on payment of the same he had not acquired a now right, tangible or inta....