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Issues:
1. Validity of orders of assessment under the Agricultural Income-tax Act, 1950. 2. Jurisdiction of the company court under section 446 of the Companies Act, 1956. 3. Compliance with the rules of natural justice in assessment proceedings. 4. Authority of the liquidation court to declare orders of assessment null and void. 5. Interpretation of the provisions of Chapter V of the Insolvency Act, 1956 in relation to unsecured debts. 6. Consideration of the question of recovery in the context of the declared invalidity of assessment orders. The High Court of Kerala considered an appeal by the State challenging the dismissal of its application under section 446 of the Companies Act, 1956, seeking recovery of amounts due under orders of assessment under the Agricultural Income-tax Act, 1950. The court noted that the assessment orders were declared null and void by the lower court due to non-compliance with natural justice rules as the official liquidator had not been heard. The property in question belonged to a deceased individual, and the income from the property was collected during the relevant years for which assessments were made. The court emphasized the principle that an order, even if voidable, remains effective until set aside by due process of law, except in cases of total nullity. The Supreme Court's decision in S. V. Kondashar v. V. .M. Deshpande was cited to clarify the jurisdiction of the company court in matters of assessment and reassessment, highlighting that the liquidation court cannot investigate the legality of assessment orders. The court concluded that the liquidation court lacked the authority to declare the assessment orders invalid and set aside the lower court's decision. The case was remitted back to the lower court to reconsider the question of recovery in light of the judgment, allowing both parties an opportunity to present their arguments. The court addressed the issue of whether the assessment orders were null and void due to non-compliance with natural justice rules. It was observed that the official liquidator had received notices regarding the assessments for the relevant years, and there was doubt whether natural justice principles were violated. The court held that even if a declaration of invalidity was warranted, it was beyond the liquidation court's competence to make such a declaration under the Companies Act. The court emphasized that the primary issue to be considered was the question of recovery, which was not adequately addressed in the lower court's judgment. Therefore, the court set aside the declaration of invalidity and remitted the case for a fresh consideration on the merits of the State's claim for recovery, ensuring both parties have an opportunity to present their contentions.
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