9911796707
TMI Blog2001 (12) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1998 made in Company Petition No. 84 of 1997, this court directed that the company known as Asia Pacific Investment Trust Limited be wound up and the official liquidator attached to this court was appointed to be the liquidator of the said company. The liquidator, on examination of the records of the company, came to the conclusion that the respondent herein owes an amount of Rs.11,60,461 along with interest with effect from August 19, 1998, to the company in liquidation, and therefore called upon the respondent by his notice dated June 8, 1999, to pay the above mentioned amount due to the company in liquidation. The respondent by its letter dated August 24, 1999, informed the official liquidator that the Assistant Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company in liquidation either from the company or from any debtor of the company without the leave of this court as stipulated under section 446(1) of the Companies Act. (ii) Whether the order under section 226(3) of the Income-tax Act issued by the Assistant Commissioner of Income-tax, dated February 17, 1998, would entitle the Income-tax Department to enforce that order against the debtor of the company on the ground that such an order was issued prior to the date of winding up order passed by this court, i.e., August 19, 1998. In my view, the issue is no more res integra and is covered by a judgment of the Federal Court reported in Governor-General in Council v. Shiromani Sugar Mills Ltd. [1946] 14 ITR 248. It was a case where the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 913, comprise any proceeding by the revenue authorities under section 46(2) of the Indian Income-tax Act, and that accordingly before forwarding the requisite certificate under section 46(2) to the Collector, which would put the machinery for the collection of the arrears of income-tax as arrears of land revenue into motion the appellant should have applied in the liquidation under section 171 of the Companies Act for leave of the winding up court". In the present case, the proceedings issued by the Income-tax Department dated, February 17, 1998, under section 226(3) of the Income-tax Act are also proceedings seeking to recover certain amounts representing income-tax dues from the company in liquidation from one of the debtors of the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment ought to have obtained leave of this court before initiating such proceedings as required under section 446(1) of the Companies Act. The purpose behind the requirement of obtaining such a leave is put by their Lordships of the Federal Court in the above-mentioned judgment in the following words: "In our judgment, it need not, and therefore should not, be confined to 'original proceedings in a court of first instance, analogous to a suit, initiated by means of a petition similar to a plaint'. Section 171 must, in our judgment, be construed with reference to other sections of the Act and the general scheme of administration of the assets of a company in liquidation laid down by the Act. In particular, we would refer to section 232. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Department is entitled to enforce its claims without leave of the company court. No doubt, the Supreme Court held that such a doctrine is applicable to India, but from the very language of article 372 of the Constitution it is clear that such an application would continue to be in force "until altered or repealed or amended by Legislature or other competent authority". To what extent the claims of the Income-tax Department are entitled for such a priority in the context of a company in liquidation, is a matter which depends on the construction of various provisions of the Income-tax Act and the Companies Act. But I do not propose to go into that question in this case for the reason that even assuming for the sake of argument that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 537 of the Act reads as follows: 537. Avoidance of certain attachments, executions, etc., in winding up by or subject to supervision of court.-(1) Where any company is being wound up by or subject to the supervision of the court-- (a) any attachment, distress or execution put in force, without leave of the court, against the estate or effects of the company, after the commencement of the winding up; or (b) any sale held, without leave of the court, of any of the properties or effects of the company after such commencement shall be void. (2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government." In the circumstances, the stand taken by the respondent is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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