9911796707
TMI Blog1973 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... or a couple of years and, thereafter, it is said that it landed in difficulties and it stopped its business. For the assessment year 1957-58, the company was assessed to income-tax under the provisions of the Indian Income-tax Act, 1922, on a total income of Rs. 2,933 and the tax assessed thereon worked out to Rs. 1,510.50. With a little assets remaining with the company, a portion of the tax was paid and the balance of Rs. 1,336 remained outstanding. The Income-tax Officer (Collection), Hubli, who is the respondent before me, finding that the arrears of tax could not be recovered, from the assets of the company, called upon the petitioner in his letter dated 30th April, 1971, to pay the balance as he was an ex-director of the company and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny previous year cannot be recovered, then every person who was a director of the private company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company." The requirements of the said section are (1) that the company should be a private limited company, (2) that the company should be wound up after the commencement of the Act, i.e., on April 1, 1962, and (3) that the tax assessed on the company should be found to be not recoverable from the assets of the company. It is open to the ex-director to prove that the non-recove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tax due from the company. The question narrows down to this. Whether the tax due from a private limited company which was struck off under section 560(5) of the Companies Act could be recovered from its past director under section 179 of the Act ? To understand what exactly is the meaning of the expression "wound up", I have necessarily to refer to the provisions of the Companies Act. Section 425 of the said Act states that the winding-up of a company may be either, (a) by the court ; or (b) voluntary; or (c) subject to the supervision of the court. It is a process by which the assets of the company are realised and its liabilities are paid. That process may be resorted to irrespective of the fact whether the company is solvent or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny are realised and its liabilities are paid in accordance with the provisions of the Companies Act. But, if the name of a company is struck off the register, its undisposed of property is not appropriated towards its liabilities. Nobody would claim that property. It vests in the Crown as bona vacantia subject to its rights to disclaim. (See The Principles of Modern Company Law, 3rd edition, by L.C.B. Gower, page 652). A reference may be made to the decision of the Calcutta High Court in In re U. N. Mandal's Estate (P) Ltd. P. B. Mukharji J. observed at page 498 thus: "But even if there were any, the situation may not be so hopeless as was argued on behalf of the applicant. Even if there were any property, such property will not be without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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