August 2012
Central Sales Tax — Provision for first charge on properties of the dealer for payment of tax — Under local Sales Tax Act — Applicable to recovery of CST — Section 9(2) of the Central Sales Tax Act, 1956 and section 50 of the Rajasthan Sales Tax Act, 1994.
By C. B. Thakar, Advocate
G. G. Goyal, Janak Vaghani, Chartered Accountants
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The petitioner being a financial institution raised question of law by filing writ petition before the Delhi High Court arising out of order of DRAT holding that Rajasthan Sales Tax Department has priority on the properties of the dealer for recovery of payment of tax payable under the Central Sales Tax Act, 1956.
Held
U/s.50 of the Rajasthan Sales Tax Act, the State is having first charge on properties of the dealer for recovery of dues under the Act. Section 9(2) of the Central Sales Tax Act provides for assessment, reassessment, collection and enforcement of payment of tax including interest or penalty payable 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 mechanism provided under the State Sales Tax Act would equally apply to the central sales tax to be collected under the CST Act. Thus, priority given u/s.50 of the RST Act to the recovery of local sales tax will apply with equal force to the recovery of central sales tax. The High Court accordingly, dismissed writ petition filed by the financial institution.
