2022 (8) TMI 1205 - Tri - Companies Law

Seeking restoration of the name of the respondent Company, i.e., M/s. Ghantakaran Mahavir Developers Pvt. Ltd. in the register maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT - To render assessment order valid in the eyes of Law and to enable the Appellant to take steps for recovery of taxes and for any further consequential proceedings, the respondent company's name needs to be restored to the Register of Registrar of Companies as if the name of the company was never struck off. Denial to restore the name of the respondent company in the Register of the RoC will not only condone the wrong doing of the respondent company but it will also encourage escapement of tax liabilities by such subterfuge, which will be prejudicial to the interest of the revenue in the long run. With respect to the objections raised by the Respondent No. 2 with respect to RoC not following the procedure required under law, the provisions of the Companies Act, 2013 r/w respective Rules, the respondent has right to approach the appropriate Court for quashing the order of striking off of the company. This Tribunal is required to consider whether the appellant is entitled u/s. 252(1)/252(3) of the Companies Act, 2013, for any order or not. The other objections is that the appellant has failed to establish prima-facie case of being a creditor to approach this Tribunal u/s. 252 of the Companies Act, 2013 on the ground that mere notice by the I.T. Department u/s. 148 of the I.T. Act and on presumption/possibility of any escapement, the appellant does not become creditor. The department can also be considered as aggrieved party as there is apprehension of escapement of tax from Respondent No. 2 and qualify u/s. 252(1) of the Act - the instructions issued by the Ministry of Finance, CBDT are required to be followed/complied by the appellant and hence, this appeal needs to be entertained. The Registrar of Companies is directed to restore the name of the Respondent Company in the Register of RoC - application allowed.

Issues:
1. Restoration of company name in the register maintained by the Registrar of Companies.
2. Jurisdiction of the Tribunal to try the appeal.
3. Validity of the appeal filed by the Income Tax Department.
4. Objections raised by Respondent No. 2 regarding the procedure followed by RoC.
5. Determination of whether the appellant is entitled to relief under Section 252 of the Companies Act, 2013.

Issue 1: Restoration of company name in the register maintained by the Registrar of Companies
The Income Tax Department filed an appeal under Section 252(3) of the Companies Act, 2013 for the restoration of the respondent company's name in the register. The Department argued that the company's name was struck off without proper intimation, hindering the assessment proceedings and potential tax recovery. The Tribunal found that restoration was necessary to prevent tax evasion and protect revenue interests.

Issue 2: Jurisdiction of the Tribunal
The appellant challenged the action of RoC, Ahmedabad, in striking off the company's name. The Tribunal asserted its jurisdiction to hear the appeal as the cause of action arose within its territorial jurisdiction. It was emphasized that the Tribunal had the authority to adjudicate on the matter.

Issue 3: Validity of the appeal filed by the Income Tax Department
The Income Tax Department contended that the restoration of the company's name was essential to conclude pending assessment proceedings and enforce tax liabilities. The Department cited relevant provisions and instructions to support its appeal, emphasizing the need to protect revenue interests. The Tribunal agreed with the Department's arguments and allowed the appeal for restoration.

Issue 4: Objections raised by Respondent No. 2
Respondent No. 2 objected to the appeal, arguing that the Income Tax Authority failed to establish a prima facie case and that the notice served to the defunct company was invalid. The respondent also raised objections regarding the liability of directors and the appellant's creditor status. However, the Tribunal found these objections insufficient to reject the appeal and emphasized the need to comply with Ministry of Finance instructions.

Issue 5: Entitlement to relief under Section 252 of the Companies Act, 2013
The Tribunal determined that the appellant, the Income Tax Department, qualified as an aggrieved party under Section 252(1) of the Act due to the potential tax evasion by the respondent company. The Tribunal upheld the Department's appeal, directing the RoC to restore the company's name in the register, ensuring the continuation of assessment proceedings and tax recovery efforts.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, and the Tribunal's decision on each issue, ensuring a comprehensive understanding of the legal aspects and implications of the case.

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