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TMI Blog1965 (4) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ising its jurisdiction under article 226. Appeal dismissed. - 211 OF 1964 - - - Dated:- 9-4-1965 - K. SUBBA RAO, J.C. SHAH AND S.M. SIKRI, JJ. Niren De, R. Ganapathy Iyer and R.N. Sachthey for the Appellants. A.V. Viswanatha Sastri, T.A. Ramachandran, J.B. Dadachanji, O.C. Mathur and Ravinder Narain for the Respondent. JUDGMENT Sikri, J. This appeal pursuant to a certificate of fitness granted by the High Court of Maharashtra at Bombay under article 133(1)( c ) of the Constitution is directed against the judgment of the said High Court in a petition under article 226 of the Constitution filed by the respondent. The India Fisheries (P.) Ltd. hereinafter called the respondent was a private limited company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent, inclusive of interest. Instead of refunding the said balance to the respondent, the Income-tax Officer set off the said amount against the balance of Rs. 3,549-12-0 which was still outstanding in respect of the income-tax demand for the year 1948-49. The respondent filed a revision petition to the Commissioner of Income-tax, but the said petition was rejected by the Commissioner on September 21, 1959, holding that the action of the Income-tax Officer was perfectly justified under the provision of section 49E of the Income-tax Act. On November 25, 1959, the respondent filed a petition under article 226 of the Constitution and prayed for a writ, direction or order for setting aside the orders of the Income-tax Officer and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund and pass appropriate orders in respect of the said amount of refund under the provisions of section 48 of the Income-tax Act. The learned Additional Solicitor-General, on behalf of the appellant, contends that section 49E gives statutory power to the Income-tax Officer, inter alia , to set off the amount to be refunded or any part of that amount against the tax remaining payable by the person to whom the refund is due, and this statutory power is; not subject to any provision of any other law. He says that the Companies Act does not take away this power Section 49E is in the following terms : "Where under any of the provisions of this Act, a refund is found to be due to any person, the Income-tax Officer, Appellate Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il and be observed with regard to the respective rights of secured and unsecured creditors and to debts provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent ; and all persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up, and make such, claims against the company as they respectively are entitled to by virtue of this section." The effect of these statutory provisions is, inter alia , that an unsecured creditor must prove his debts and all unsecured debts are to be paid pari passu . Therefore, once ..... X X X X Extracts X X X X X X X X Extracts X X X X
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