Ifci Ltd. vs Commercial Taxes Officer & ...
2011 Latest Caselaw 2978 Del

        *             IN THE HIGH COURT OF DELHI AT NEW DELHI



                                               Reserved on : 11.05.2011
        %                                   Date of decision : 03.06.2011


        +                         WP (C) No.337/2011


        IFCI Ltd.                       ...       ...       ...       ...       ...PETITIONER


                     Through :          Mr.Dinkar Singh, Advocate


                                        -VERSUS-


        COMMERCIAL TAXES OFFICER & ANR.....                             RESPONDENTS


                   Through :            Mr.Arunav Patnaik and Mr.D.B.Ray,
                                        Advocates for R-1.

                                        Mr.Shahzad Khan, Advocate for R-2.


        CORAM:
        HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
        HON‟BLE MS. JUSTICE RAJIV SHAKDHER


        Whether the Reporters of local papers
        may be allowed to see the judgment?                             Yes

        To be referred to Reporter or not?                              Yes

        Whether the judgment should be                                  Yes
        reported in the Digest?


        SANJAY KISHAN KAUL, J.

1. The petitioner seeks to raise a question of law as to

whether by virtue of the deeming provisions contained

in Section 9(2) of the Central Sales Tax Act, 1956 („the

CST Act‟ for short), there is any first charge on the _____________________________________________________________________________________________

property of the dealer. The petitioner being a financial

institution holding a decree against the dealer claims

absence of such first charge in view of there being no

specific provision in the CST Act though the petitioner

does not dispute such first charge in respect of the

amount due under the Rajasthan Sales Tax Act, 1994

(„the RST Act‟ for short).

2. The petitioner is a public financial institution

incorporated under the Companies Act, 1956 which

had advanced loan facilities to M/s West Indian Gas

Products Limited guaranteed by certain guarantors.

The said entity also took loans from other banks and

financial institutions, but failed to maintain financial

discipline. The petitioner along with ICICI filed an OA

before the DRT, Jaipur and in those proceedings a

recovery certificate was issued for an amount of

Rs.44,78,65,444/- on 20.12.2000. The said certificate

was thereafter sought to be executed. It is during the

pendency of the execution proceedings that the

respondent, Commercial Taxes Officer, Special Circle,

Udaipur filed an application dated 01.06.2004 before

the Recovery Officer seeking right of first

appropriation from the amounts released by sale of

assets of the debtor towards discharge of statutory

liability of Rs.60,86,172/- under the RST Act and

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Rs.44,04,415/- under the CST Act totaling to

Rs.1,08,73,587/- and interest due thereon.

3. Such a right of first appropriation insofar as the dues

under the RST Act are concerned, was claimed on the

basis of Section 50 of the RST Act, which reads as

under:

"50. LIABILITY UNDER THIS ACT TO BE THE FIRST CHARGE.

Notwithstanding anything to the contrary contained in any law for the time being in force, any amount of tax and any other sum payable by a dealer or any other person under this Act, shall be the first charge on the property of such dealer or person."

4. Similarly, the right of first appropriation insofar as the

dues under the CST Act are concerned, was sought to

be exercised in view of the provisions of Section 9(2)

of the said Act, which reads as under:

"LEVY AND COLLECTION OF TAX AND PENALTIES ... ....

(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re- assess, collect and enforce payment of tax, including any interest or penalty, payable by a dealer under this Act as if the tax or interest or penalty payable by such a dealer under this Act is a tax or interest or penalty payable under general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State;

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and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, charging or payment of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly:

Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provisions for all or any of the matters specified in this sub- section."

5. The recovery officer, however, dismissed the

application filed by the respondent against which an

appeal was preferred by the respondent before the

DRT, Jaipur. This appeal was allowed giving first

appropriation right vide order dated 20.12.2000. Now

the petitioner being aggrieved preferred an appeal

before the DRAT. It is during the said proceedings that

an affidavit is stated to have been filed by the

respondent averring that the original demand under

the RST Act was Rs.9,02,321/- and under the CST Act

was RS.40,07,415/- totaling to Rs.49,09,736/-. The

interest due thereon under the RST Act was quantified

at Rs.15,30,062/- and under the CST Act, as

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Rs.53,75,563/-, totaling to Rs.1,18,15,353/- inclusive

of interest outstanding against the company.

6. The petitioner in the proceedings before the DRAT

conceded the right of first appropriation insofar as the

dues under the RST Act were concerned in view of the

provisions of Section 50 of RST Act, but sought to raise

the issue in view of what was claimed to be the

absence of any provision for such appropriation under

the CST Act. The petitioner claimed that the provisions

of Section 9(2) of the CST Act could not give priority to

the respondent over the claim of secured creditors.

This plea was, however, not accepted by the DRAT in

terms of the impugned order dated 04.11.2010. It is

in view of this factual matrix that the question of law

as referred to aforesaid arises for consideration.

7. The reasoning of the DRAT is predicated on a

harmonious construction of the RST Act and the CST

Act. The CST Act stipulates that tax is payable by a

dealer under that Act as if it was a tax or interest or

penalty payable under the general sales tax law of

that State and for that purpose they may exercise all

or any of the powers they have under the general

sales tax law of that State. It was thus concluded that

no distinction could be made between the State sales

tax legislation and the CST insofar as recovery of tax

is concerned. The DRAT thus observed that the Court

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would give effect to the will of the legislature as

discernible from the object and scheme of the

enactment and the language employed therein. This

is the sole discussion in the impugned judgment.

8. The submission of learned counsel for the petitioner

before us was that in the absence of any specific

provision in the CST Act, creating such priority of claim

for the amount payable under that Act, the vested

legal right of a secured creditor, who always has a

priority of claim on a mortgaged debt, would prevail.

The CST Act did not contain any specific provision akin

to Section 50 of the RST Act and Section 9(2) of the

CST Act was claimed to be not specific to create

liability under the CST Act to be first charge on the

property of the dealer. This sub-Section, it was

submitted, merely contained provisions for levy &

collection of tax and penalty and could not be read to

be pari materia to provisions of Section 50 of the RST

Act. It was the submission of learned counsel for the

petitioner that Section 9(2) of the CST Act had a

limited scope. It empowered the State authorities to

have all the powers for purposes of assessment, re-

assessment, collection and enforcement of payment of

tax payable by the dealer under the CST Act. On the

other hand, the RST Act contains specific provisions

for assessment, re-assessment in Chapter (IV) while

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Chapter (V) deals with tax liability, recovery and

refund. Sections 52 and 53 of the RST Act fall in

Chapter (V) which provides for general and special

modes of recovery and enforcement of tax. Chapter

(VI) empowers the State tax authorities to impose

penalties and to institute prosecution against the

dealer. It was, thus, submitted that the words

„assessment‟, „re-assessment‟, „collection‟ and

„enforcement of tax‟ cannot be expanded to include

within the ambit the effect of Section 50 of the RST

Act which creates an established right of precedence

in favour of the State sales tax authorities for the

amount due under that Act.

9. Learned counsel for the petitioner referred to Section

52 of the RST Act, which reads as under:

"52 GENERAL MODES OF RECOVERY.

Without prejudice to other provisions in the Act, where any tax or other sum payable by a dealer or a person under this Act is not paid in accordance with the provisions of this Act or the rules made or notification issued thereunder, it shall be recoverable as an arrear of land revenue and the assessing authority or any other officer having jurisdiction for the time being over such dealer or person shall be empowered to recover such tax or other sum by attachment and sale of the movable or immovable property of such dealer or person and all the provisions of the Rajasthan Land Revenue Act, 1956 (Rajasthan Act No. 15 of 1956) read with the Rajasthan Land Revenue (Payments, Credits, Refunds and Recovery) Rules, 1958 shall mutatis mutandis apply."

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10. The recovery of tax can, thus, take place by

attachment and sale of moveable and immovable

properties and the provisions of Rajasthan Land

Revenue Act, 1956 and Rajasthan Land Revenue

(Payments, Credits, Refunds and Recovery) Rules,

1958 apply mutatis mutandis. Learned counsel sought

to refer to Section 256 of the Rajasthan Land Revenue

Act, 1956 which deals with recovery of miscellaneous

revenue and other monies. In M/s Builders Supply

Corporation v. The Union of India and Ors.; AIR 1965

SC 1061, the Constitution Bench of the Supreme Court

dealt with the Common Law Doctrine of priority of

State debts. It was held that this Common Law

Doctrine having been recognized by Indian High

Courts prior to 1950, constitutes „law in force‟ within

the meaning of Article 372(1) of the Constitution of

India and continues to be in force. Section 46 of the

Income Tax Act, 1922 was held to merely provide for

the recovery of arrears of tax due from an assessee as

it were an arrear of land revenue and thus the

provision was held not to convert arrears of tax into

arrears of land revenue to indicate that after receiving

the certificate from the Income Tax Office, the

Collector has to proceed to recover the arrears as if

the arrears were arrears of land revenue. This section

did not displace the application of the doctrine of the

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priority of Crown debts. Learned counsel also referred

to the judgment of the Supreme Court in Dena Bank v.

Bhikhabhai Prabhudas Parekh & Co. and Ors.; (2000) 5

SCC 694, once again dealing with the doctrine of

priority of State debt. It was held that Section 158(1)

of the Karnataka Land Revenue Act, 1964 not only

gives statutory recognition to the doctrine of the

State‟s preferential right to recovery of debts, but

extends its applicability even to private secured debts

forming the subject-matter of mortgages, judgment-

decrees, execution and attachment orders, etc.

Section 190 of the Karnataka Land Revenue Act, 1964

r/w Section 13(3)(a) of the Karnataka Sales Tax Act,

1957 made the procedure for recovery of arrears of

land revenue applicable to recovery of sale tax

arrears. The priority or precedence of State debt in the

form of sales tax was upheld in respect of the

compromise amount between a financial institution

and debtor. It was thus submitted that unless a

specific provision is included, the principle of priority

of Crown debt would not apply.

11. Learned counsel for the respondent on the other

hand sought to emphasize the constitutional scheme

and the subsequent enactment of CST Act in

pursuance thereto.

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12. In order to appreciate this plea, it would be

appropriate to reproduce some of the provisions,

Articles 269 and 286, incorporated in Part XII of the

Constitution of India, which have been referred to by

the learned counsel for the respondent.

"269. Taxes levied and collected by the Union but assigned to the States.

(1) Taxes on the sale or purchase of goods and taxes on the consignment of goods shall be levied and collected by the Government of India but shall be assigned and shall be deemed to have been assigned to the States on or after the 1st day of April, 1996 in the manner provided in clause (2).

Explanation-For the purposes of this clause, -

(a) The expression "taxes on the sale or purchase of goods" shall mean taxes on sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce;

(b) The expression "taxes on the consignment of goods" shall mean taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-

State trade or commerce;

(2) The net proceeds in any financial year of any such tax, except in so far as those proceeds represent proceeds attributable to Union territories, shall not form part of the Consolidated Fund of India, but shall be assigned to the State within which that tax is leviable in that year, and shall be distributed among those States in accordance with such principles of distribution as may be formulated by Parliament by law.

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(3) Parliament may by law formulate principles for determining when a sale or purchase of, or consignment of, goods takes place in the course of inter-State trade or commerce.

286. Restrictions as to imposition of tax on the sale or purchase of goods.

(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place-

(a) Outside the State; or

(b) In the course of the import of the goods into, or export of the goods out of, the territory of India.

(2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1).

(3) Any law of a State shall, in so for as it imposes, or authorises the imposition of, -

(a) A tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or

(b) A tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29A) of article 366,

Be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify."

13. A reading of the aforesaid shows that Article 269

of the Constitution of India provides for taxes on the

sales or purchase of goods to be levied by

Government of India, but for the benefit of the States,

to whom it is to be assigned, such taxes are not to

form part of the Consolidated Fund of India and the _____________________________________________________________________________________________

Parliament may by law formulate principles for

determining inter-State trade or commerce.

Simultaneously, Article 286 of the Constitution of India

restricts imposition of tax on the sale or purchase of

goods by any State in the process of inter-State trade

or commerce and the law in this behalf formulating

principles when a sale or purchase of goods takes

place in any of the ways mentioned in clause (1) of

Article 286 of the Constitution of India is vested in the

Parliament in terms of clause (2) of the Constitution of

India.

14. Thus, the constitutional provisions have the

objective to ensure that individual States do not

impose differential or competitive sales tax which

would interfere with the inter-State trade and

commerce and hinder the creation of a single

economic unit across the country. It is, therefore, the

Parliament which has been given the powers to define

inter-State sale transactions and to levy taxes on

them. In this regard, Entries 92A and 92B of the List I,

which is the Union List, in Seventh Schedule to the

Constitution of India, read as under:

"92A Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce.

92B. Taxes on the consignment of goods (whether the consignment is to the person _____________________________________________________________________________________________

making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce.

15. The collection made by the Central Government

is to be the revenue of the States. Thus, it was

contended that though the imposition of the Central

sales tax on inter-State sales is within the domain of

Parliament, the revenue from Central sales tax is of

the State within which the tax is leviable. The CST Act

was, thus, enacted by the Parliament formulating

principles for determining when a sale or purchase of

goods take place in the course of inter-State trade or

commerce or outside the State and to levy taxes on

such sale and determine the distribution of revenue so

collected. This is stated to be apparent even from the

Preamble of the CST Act, which reads as under:

"An Act to formulate principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State or in the course of import into or export from India, to provide for the levy, collection and distributions of taxes on sales of goods in the course of inter-State trade or commerce and to declared certain goods to be of special importance in inter-State trade or commerce and specify the restrictions and conditions to which laws imposing taxes on the sale or purchase of such goods of special importance shall be subject."

16. It was submitted that Section 3 of the CST Act

defines inter-State trade or commerce while Section 4

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of the CST Act deals with when a sale or purchase of

goods is stated to take place outside a State. The

constitutional mandate is further fulfilled by Section

9(3) of the CST Act which assigns the proceeds

collected under that Act to the State. Section 9(3) of

the CST Act reads as under:

"9. Levy and collection of tax and penalties:- .....

(3) The proceeds in any financial year of any tax, including any interest or penalty including any penalty, levied and collected under this Act in any State (other than a Union Territory) on behalf of the Government of India shall be assigned to that State and shall be retained by it; and the proceeds attributes to Union Territories shall form part of the Consolidated Funds of India."

17. Since the Central sales tax revenue collected

within a State forms part of the revenue of the State,

the actual collection has been left to the relevant

State in view of Section 9(1) of the CST Act, which

reads as under:

"9. Levy and collection of tax and penalties:-

(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by the Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced.

Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods and being also a sale which does not fall within sub-section (2) of section 6, the tax shall be levied and collected

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a) where such subsequent sale has been effected by a registered dealer, in the State from which the registered dealer obtained or, as the case may be, could have obtained, the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods, and,

b) where such subsequent sale has been effected by an unregistered dealer in the State from which such subsequent sale has been effected."

18. It is in view of the aforesaid constitutional

scheme read with the provisions of CST Act that

Section 9(2) of the CST Act makes a deeming

provision that the assessment and collection under the

CST Act is to be taken as tax, interest or penalty

payable under the general sales tax law of the State.

For this purpose, all powers as exist under the general

sales tax law of the State would be available for

collection of the Central sales tax.

19. Learned counsel proceeded to thereafter explain

the provisions of the RST Act where Section 3 deals

with the incidence of tax and Section 3(6) of the CST

Act provides that a dealer registered under the CST

Act, who was not liable to get registration and pay tax

under Section 3(1) of the RST Act, was nevertheless

liable to get registration and pay tax in accordance

with the provisions of the RST Act whatever may be

the amount or extent of his turnover. Section 4(1) of

the RST Act provides for both the State sales tax and

the Central sales tax payable by a dealer under the _____________________________________________________________________________________________

RST Act to be a single point in the series of sales by

successive dealers. Section 50 of the RST Act gives

the right of first charge to the tax to be collected

under the RST Act. It was thus contended that the

Central Sales Tax thus also becomes a tax under the

RST Act and Section 50 of the RST Act is applicable to

the collection of Central sales tax within the State of

Rajasthan.

20. Learned counsel for the respondent referred to

the judgment in Central Bank of India v. State of

Kerala (2009) 4 SCC 94 where a similar provision in

the Bombay and Kerala Sales Tax Acts were examined

in the context of recovery of debts under the Recovery

of Debts due to Banks and Financial Institutions Act,

1993 („RDDBFI Act‟ for short). It was held that where

a secured creditor seeks to recover debts under the

RDDBFI Act, precedence has to be given to dues owed

to a State when there is a statutory provision creating

first charge in favour of the State over the property of

the assessee. The RDDBFI Act being a subsequent

enactment, the Parliament is presumed to be aware of

the statutory provisions creating first charge for the

State debts and there is nothing contrary contained in

the DRT Act. The observations made in State Bank of

Bikaner & Jaipur v. National Iron Steel Rolling

Corporation and Ors; (1995) 2 SCC 19 were cited with

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approval holding that when a first charge is created by

operation of law over any property, that charge will

have precedence over even an existing mortgage.

21. Learned counsel submitted that a majority

judgment of the Constitution Bench in Khemka & Co. v.

State of Maharashtra; (1975) 2 SCC 22, is to be

understood to be laying down the ratio that the sales tax

authorities had no authority to levy a penalty under the

general sales tax law of a State for the collection of

Central sales tax in the absence of clear statutory

provisions in the CST Act. However, Section 50 of the

RST Act creating a first charge for the Crown debt was

not akin to a penalty or additional tax liability and the

right of first charge only deals with a question of liability

owed to a State to be paid in cases where there are

multiple creditors. The recovery of dues by means of a

first charge was thus contended to be distinct from a tax

liability or penalty and was in the domain of collection

and enforcement of payment of tax. Similarly, in Dena

Bank v. Bhikhabhai Prabhudas Parekh & Co. and Ors.‟s

case (supra), the Supreme Court held that where the

principle of first charge has been provided in the

Karnataka Land Revenue Act, 1964 and Karnataka

Sales Tax Act, 1957 provide the sales tax dues to be

collected as arrears of land revenue, the principles of

first charge were held to be applicable for the dues.

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Thus, this was so even without any explicit provision

of first charge in the Karnataka Sales Tax Act, 1957.

22. We have considered the aforesaid submissions

of learned counsel for the parties on the limited issue

before us.

23. We may note at the inception that though a

number of judgments have been cited, there is really

no dispute about the principle that the Crown debt will

have priority where specific provisions have been

made in the State act dealing with the sales tax or

even otherwise in statutes such as the land revenue

act. This is not even the plea of the petitioner, who

has agreed to accept the principle of Crown debt

insofar as the liability vis-a-vis the State sales tax is

concerned. What is sought to be disputed is only the

liability towards the component of Central sales tax

imposed under the CST Act on account of absence of

any provision of such priority being specifically

stipulated in the CST Act. We are in agreement with

the submission of the learned counsel for the

respondent that in order to appreciate whether such a

liability under the CST Act would be treated as a first

charge or not, the principles under which the sales tax

is imposed in a State and under the CST Act taking

into consideration the constitutional scheme has to be

appreciated. It can really not be in doubt that Articles

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269 and 286 of the Constitution of India make it

abundantly clear that the origin of Central sales tax is

the inter-State trade or commerce. It is with the object

of facilitating a single economic unit across the

country and to avoid any differential and competitive

sales taxes that Central sales tax is imposed on inter

State sale transactions. However, unlike other

impositions of Central Government which may go to

the Consolidated Fund of India, Central sales tax is

peculiar in its nature as the benefit of the same goes

only to the State even though such collection is under

a Central Act and the relevant entries being 92A and

92B which are in Part I, which is the Central List,

forming part of the Seventh Schedule to the

Constitution of India. Thus, Central sales tax is meant

to be appropriated for the benefit of State.

24. The matter does not rest at that as not only the

proceeds of the tax are meant for the benefit of the

State, the actual recovery also takes place by the

State. It is in view thereof that Section 9(1) of the CST

Act provides that even tax payable under the CST Act

though levied by the Government of India would be

collected by the State Government in accordance with

provisions of Section 9(2)of the State Act from which

the movement of goods commences. This provision is

followed by Section 9(2) of the said Act (which is the

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relevant provision for consideration in the present

case) providing for assessment, re-assessment,

collection and enforcement of payment of tax

including interest or penalty payable by a dealer

under the CST Act to be as if a tax, interest or penalty

is payable under the general sales tax law of the

State. Thus, for all ends and purposes, the mode of

assessment, re-assessment, collection and

enforcement of payment of tax mechanism provided

under the State sales tax act would equally apply to

the Central sales tax to be collected under the CST

Act. Not only this, but also all or any of the powers as

are exercisable under the general sales tax law of the

State, are to be available for the recovery of the

central sales tax.

25. On a query, we are informed that the principle of

priority of Crown debt is incorporated in almost all the

State sales tax acts. We had, in fact, put a specific

query to learned counsel for the petitioner as to

whether he was aware of any State sales tax act

where such priory provision was not incorporated, but

the learned counsel was not able to give any such

example of a State act nor is such an example

incorporated even in the subsequent written synopsis

filed by the petitioner.

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26. If the aforesaid scheme is appreciated in its true

spirit and with the legislative enactment in mind

(preamble to the CST Act itself stating that the Act

was to formulate principles determining inter State

trade or commerce and for levy and collection of taxes

on sale of goods in the course of inter State trade or

commerce), we have no doubt that not only

assessment & re-assessment but also mode of

recovery and the principle of priority of claim as

incorporated under Section 50 of the RST Act would be

available for collection of Central sales tax within the

State of Rajasthan in view of the provisions of Section

9(2) of the CST Act. The judgments cited at the bar

and referred to aforesaid, in fact, incorporate this

general principle of not only Crown debt but the

collection of Central sales tax for the benefit of State

and thus the provisions of the State Act being

available for such enforcement.

27. The Central Bank of India v. State of Kerala‟s

case (supra), however, only refers to the priority of

sales tax debt under the local sales tax act over a

secured creditor. This aspect was reinforced in State

Bank of Bikaner & Jaipur v. National Iron Steel Rolling

Corporation and Ors‟s case (supra), once again giving

precedence to a charge created by operation of law

over a charge by way of an existing mortgage. The

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judgments cited by learned counsel for the petitioner

in M/s Builders Supply Corporation v. The Union of

India and Ors.‟s case (supra) and Dena Bank v.

Bhikhabhai Prabhudas Parekh & Co. and Ors.‟s case

(supra) are also on the same lines. However, the

question involved in the present case is whether such

a charge by operation of law has been created under

the CST Act. We have come to a conclusion that such

a charge stands created if meaning is to be given to

the words "collection" and "enforcement" found in

various provisions, more specifically Sections 9(1) and

9(3) of CST Act read with the relevant provisions of

Section 9(2) of the CST Act, coupled with the right of

appropriation conferred in the States though the tax

may be collected by the Central Government. Thus,

the priority given under Section 50 of the RST Act to

the recovery of local sales tax will apply with equal

force to the recovery of Central sales tax qua inter-

State trade or commerce.

28. In view of the aforesaid provisions, we find no

merit in the writ petition, which is dismissed leaving

the parties to bear their own costs.

SANJAY KISHAN KAUL, J.

        June 03, 2011                                     RAJIV SHAKDHER, J.
        dm

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