RAJRATHA NARANBHAI MILLS. CO. LTD. vs SALES TAX OFFICER, PETLAD

The Supreme Court interpreted Section 530(1)(a) of the Companies Act, 1956, clarifying that the State's claim for priority regarding sales tax dues must be for amounts that became due and payable within the twelve months preceding the relevant date. The Court held that sales tax is considered due when an assessment order is made and a notice of demand is served, thus allowing the State's claim for priority for amounts assessed within that timeframe. The appeal was allowed, reversing the lower court's decision regarding the priority of sales tax claims.