Section 16-B Of Himachal Pradesh General Sales Tax Act Is Not Ultra Vires Any Provision Of Law: Supreme Court Reiterates
Live LawThe Supreme Court has ruled that Section 16-B of the Himachal Pradesh General Sales Tax Act, 1968 is not ultra vires any provision of law. The court further remarked that the State cannot resort to the provisions of the Himachal Pradesh Land Revenue Act, 1954 for recovering sales tax dues as arrears of land revenue by creating a charge on the mortgaged property under Section 16-B of the HPGST Act, when proceedings under the HPLR Act were not initiated upon notice to the defaulters and the sum owed to the department had not been finally determined. Prior thereto, with effect from 1st September, 2016, section 31B was introduced in the DRT Act extending similar benefit of priority to a secured creditor.” Thus, while considering the Himachal Pradesh High Court’s 2008 judgment/ order, where it had held that Section 16-B of the HPGST Act was inconsistent with Section 35 of the SARFAESI Act, the court said: “Section 35 of the SARFAESI Act could not have been construed as conferring any right on a secured creditor to claim priority over dues of the State in the absence of a provision in that behalf which presently can now be claimed, subject to other conditions being fulfilled, in view of section 26E of the SARFAESI Act.” The court thus concluded: “In the light of the above, while answering the second issue we hold that section 16-B of the HPGST Act is a perfectly valid piece of legislation and is not ultra vires the Constitution and/or the Banking Companies Act as erroneously held in the decision of the High Court dated 2nd January, 2008.” The bench was also dealing with another appeal involving the interpretation of Section 16-B of HPGST Act, where the State had challenged the order of the Himachal Pradesh High Court where the latter had directed the tehsildar to mutate the property purchased by the respondent, M/s A.J. Himachal Pradesh General Sales Tax Act, 1968 : Section 16-B- The Supreme Court has ruled that Section 16-B of the HPGST Act is not ultra vires any provision of law. The court remarked that the State cannot resort to the provisions of the Himachal Pradesh Land Revenue Act, 1954 for recovering sales tax dues as arrears of land revenue by creating a charge on the mortgaged property under Section 16-B of the HPGST Act, when proceedings under the HPLR Act were not initiated upon notice to the defaulters and the sum owed to the department had not been finally determined.
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