Clause 218 - Recovery in the case of a company in liquidation - Direct Taxes Code Bill, 2009

Recovery in the case of a company in liquidation 218. (1) The liquidator shall inform the Assessing Officer, who has jurisdiction to assess the income of the company, of his appointment within thirty days of his becoming the liquidator. (2) The Assessing Officer shall, within three months from the date on which he receives the information, intimate to the liquidator the amount which, in his opinion, would be sufficient to provide for any tax arrears or any amount which is likely to become payable thereafter, by the company under this Code or under any law repealed by this Code. (3) The liquidator- (a) shall not part with any of the assets of the company, or the properties, in his custody until he has been intimated by the Assessing Officer under sub-section (2); and (b) on being so intimated, shall set aside an amount equal to the amount intimated. (4) Upon receipt of the intimation from the Assessing Officer under sub-section (2), the amount so intimated shall, regardless of anything contained in any other law for the time being in force, be the first charge on the assets of the company remaining after payment of the following dues:- (a) workmen's dues; and (b) debts due to secured creditors to the extent such debts rank under clause (iii) of the proviso to sub-section (1) of section 529 of the Companies Act, 1956 pari passu with such dues. (5) The liquidator shall be personally liable for the payment of the amount payable by the company, if he- (a) fails to inform in accordance with sub-section (1); or (b) fails to set aside the amount as required by sub-section (3). (6) The obligations and liabilities attached to the liquidator under this section shall attach to all the liquidators jointly and severally in a case where there are more than one liquidator. (7) The provisions of this section shall prevail over anything to the contrary contained in any other law in force. (8) For the purposes of this section,- (a) "liquidator" in relation to a company shall include a receiver of the assets of the company; (b) "workmen's" and "workmen's dues" shall have the meaning assigned to it in section 529 of the Companies Act, 1956.