raised was whether the
recovery of sales tax dues (amounting to Crown debt)
shall have precedence over the right of the bank to
proceed against ... subject.
Crown debt means the debts due to the State or the
king; debts which a prerogative entitles the Crown
to claim priority for before
whether the amount claimed by the Sales Tax
Department is a crown debt. This question was considered by
Hon‟ble Supreme Court in Union ... subject. Crown
debt means the debts due to the State or the king;
debts which a prerogative entitles the Crown to
claim priority for before
nothing but crown debts. The crown debts could have
priority over the unsecured debts. But, the crown debts
could not have priority over the secured ... that
the Crown has no precedence over a pledgee of goods. In
the present case, the common law of England qua Crown
debts became applicable
mortgagee right/as the secured creditor has priority over the
crown debt, failed to clarify and pass necessary orders.
6. The learned counsel ... that the secured creditor will have a priority over the crown debt as held by the
Hon'ble Supreme Court in the decision reported
would also not even otherwise
come within the purview of the crown debt. Even a crown debt
could be discharged only after the secured creditors ... subject. Crown debt means
the debts due to the State or the king; debts which a
prerogative entitles the Crown to claim priority for before
property will prevail over all other dues/debts including the crown
debts. The following decisions were already made by this Court and
the Apex Court ... that the Crown has no
precedence over a pledgee of goods. In the
present case, the common law of England qua
Crown debts became applicable
support of the contention that bank debts will have charge, over crown debt,
learned counsel for the petitioner relied upon the decisions of the Division ... private debts, which is an unsecured debt, but such
doctrine of first charge/priority over the property cannot prevail over security
debts of a person
would also not even
otherwise come within the purview of the Crown debt.
Even a Crown debt could be discharged only after the
secured creditors ... subject. Crown debt means the 'debt due to the
State of the Kind; debts which a prerogative
entitles the crown to claim priority
shall be paid in priority to all other debts
(a) all debts due to the Crown or to any local authority;
(6) all salary ... debts due to Crown have priority, in spite of the provision in Section 230, giving priority to specific Crown debts On the contrary
held that the central sale tax assumes the character of Crown
debt, and hence it is entitled to priority over other debts in realisation ... debt for a
preferential treatment is available only against unsecured debts, and it
does not extend to the extent of superseding prior secured debts
