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Judgment
Sathiadev, J.—This writ petition is filed challenging the demand for payment of sales tax for assessment No. CST 859/74-75 dated 13th
December, 1978, from the petitioner-company for the assessment year 1974-75.
In the affidavit filed in support of the petition, it is claimed by the petitioner that originally the management of the undertaking of Burn & Co. Ltd.
was taken over by the Central Government with effect from 19th December, 1973, by virtue of the Burn Company and Indian Standard Wagon
Company (Taking Over of Management) Act, 1973. Later, Burn & Co. was nationalised under Act 97 of 1976 and by virtue of the provisions of
that Act, with effect from 1st April 1975, the undertaking, i.e., the assets only of Burn & Company Ltd. and the right, title and interest of the said
company in relation to the undertaking stood transferred to an vested absolutely in the Central Government. The appointed day fixed under the Act
u/s 2(a) was 1st April, 1975. It is claimed that the virtue of section 5(1) and (3)(a), (b) and (c) of Act 97 of 1976, every liability of Burn & Co.
Ltd., in respect of any period prior to the appointed day became the liability of the concerned company, i.e., Burn & Co. Ltd., and not either the
Central Government or the petitioner-company, which is known as Burn Standard Company Limited.
When the third respondent made a demand for payment of Central sales tax for the year 1974-75, the petitioner-company immediately
informed him that the order of assessment for the period anterior to 1st April, 1975 is illegal and without jurisdiction and that it is only Burn &
Company which would be liable to pay tax. In spite of such a clarification, an assessment order dated 29th November, 1977, was served on the
petitioner and a notice dated 16th August, 1978, was sent demanding a payment of arrears of tax of Rs. 92,809 within seven days of the receipt of
the notice. A reply was promptly sent on 19th August, 1978, stating as to how the petitioner-company is not liable to pay tax.
Since an order of assessment had already been passed, an appeal was preferred to the second respondent and during the course of the hearing,
the Advocate for the petitioner-company reiterated the legal position and in spite of it, except that the matter was adjourned, no stay was granted.
In the meanwhile, purporting to act u/s 27 of the Tamil Nadu General Sales Tax, 1959, a notice was issued to the State Bank of India, Salem Main
Branch, for recovery of the tax amount, and which has resulted in the filing of this writ petition. This third respondent having passed orders on 13th
December, 1978, treating the petitioner-company as liable to pay the sales tax for the year 1974-75, this petition is filed challenging its legality.
In the counter-affidavit, it is stated that for the year 1974-75 a demand was made on Burn & Co., which was the assessee on the file of the third
respondent and that it was duly served on the petitioner-company on 29th November, 1977. In the meanwhile, since an appeal had been
preferred, the fourth respondent was approached u/s 26 read with rule 18(8) for payment of the amount due, as no stay had been obtained by the
petitioner. After receipt of the letter from the petitioner-company dated 19th August, 1978, stating that the newly formed company has no carry
over liability of the previous company, the Commissioner of payments constituted under Act 97 of 1976 was approached, but he turned down the
request for payment of arrears of tax on the ground that the claim had not been filed before him on or before 30th April 1978, as provided u/s 17
of the Act. A reminder was sent, but it was of no avail. Though the petitioner would come forward to state that it is not liable to pay tax and other
liabilities prior to 1st April, 1975, in fact, it had paid the taxes payable for the previous years, being 1969-70 to 1973-74, on the dates furnished in
paragraph 3 of the counter-affidavit. Such being the position, it is strange that for this assessment year, it had taken a contrary and different stand.
It is also stated that pre-assessment notice was issued on M/s. Burn & Co. Ltd. on 25th August, 1977, and it was received only by the
petitioner-company on 29th August, 1977, and which has responded on 12th September, 1977. The other assessment for the same year was also
made on the petitioner-company on 14th November, 1977. In conclusion, it is stated the petitioner-company being the successor company is
bound to pay the liabilities, particularly the payment of Central sales tax in view of the provisions made in section 18 of Act 97 of 1976.
The counsel for the petitioner would first contend that in view of the specific provision made u/s 5 of Act 97 of 1976, every liability other than
the liabilities specified in sub-section (2) therein, in respect of any period prior to the appointed day shall be the liability of the concerned company
and shall not be enforceable as against the Central Government or the undertaking. The third respondent had no jurisdiction to treat the petitioner
as a ""dealer"" under provisions of the Tamil Nadu General Sales Tax Act, 1959, and to demand payment of sales tax for the period prior to 1st
April, 1975. On behalf of the Government Pleader, the contention taken is that, for prior periods, particularly for the years, when the petitioner-
company had come forward to pay the arrears of sales tax, the objection taken for this assessment year alone is baseless.
It is not what has been done by the petitioner-company during the earlier years that is relevant, when the petitioner-company came forward to
challenge the right of the third respondent to claim payment of arrears of tax in the face of what has been provided u/s 5 and also section 25 of Act
97 of 1976. u/s 25, it is stated that the provisions of the said Act shall have overriding effect over other enactments, wherever it is inconsistent with
the provisions contained in this Act. Therefore when a specific provision is made u/s 5(1) restricting the liability of the petitioner-company only in
respect of transactions on and from the appointed dated, i.e., 1st April, 1975, for any liabilities incurred by the erstwhile company, being Burn &
Company Ltd., the assessment can be made only on it. It is not in dispute that even today Burn & Company is still existing.
The counsel for the petitioner also relies upon the decision in Western Coal Fields Ltd. v. Sales Tax Officer [1977] 40 STC 225, wherein in
respect of Coal Mines (Nationlisation) Act, under similar circumstances it has been held that the peremptory provisions found in section 28 therein,
which corresponds to section 25 in this Act, has an overriding effect, and therefore, the provisions of the Sales Tax Act will have to be read
subject to the provisions made in the Central Act. Section 7(1) therein is more or less similar to section 5(1) in Act 97 of 1976.
Therefore, in respect of any claim of arrears of sales tax for any period prior to 1st April, 1975, the petitioner-company cannot be proceeded
against.
The other point taken is about two assessment orders having been passed by the third respondent for the same assessment year, one against
Burn & Co., and also against the petitioner-company. It is not disputed that two such orders have been passed. There is no provision made in the
Sales Tax Act for making simultaneously two assessments for the same assessment year, in respect of the same transactions. Either the third
respondent should have confined himself to one or the other assessment, and he cannot proceed against both the companies by having parallel
assessment orders, which is an illegal course and which is not contemplated under the provisions of the Act.
There is yet another point taken based on section 18 of Act 97 of 1976. Section 18 contemplates priorities to be given the Commissioner
while disbursement of the amounts collected by him. This section cannot be relied upon by the respondents to content that it is in conflict with
section 5(1) of the Act. The right to collect tax in the order of priority as found in the Second Schedule, Part B, of Act 97 of 1976, could be
applicable only when the Commissioner is approached for payment of the amount. In the instant case, the Commissioner has already rejected the
claim of the third respondent on the ground that it has not been filed before 30th April, 1978. Therefore section 18 cannot be relied upon to
contend that the right to collect sales tax from the undertaking of the Central Government is still preserved.
Therefore, when on the main point itself it has been held that on the appointed day, the past liabilities of the company cannot be recovered
either from the Central Government or the undertaking, the rule nisi issued is made absolute. There will be no order as to costs.