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TMI Blog2023 (6) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... affairs of the company, the petitioners being the erstwhile directors are to assist the official liquidator in affairs of the company even after winding up. Petitioners relief on grounds stated thus lies in praying for discharge before the trial court, which the Court is to consider in accordance with law, on adding the official liquidator as a party to the case, first and then consider the prayer for discharge if any. Accused Kailash Chand Jain s petition praying for discharge is still pending before the Metropolitan Magistrate, Calcutta. The revisional application is accordingly dismissed. Ld' Magistrate to proceed expeditiously with the case as per observation in the body of this judgment, but not being influenced by them. - CRR 834 of 2020 With CRAN 1 of 2023 - - - Dated:- 19-6-2023 - HON BLE JUSTICE SHAMPA DUTT (PAUL) For the Petitioners : Mr. Nirmalya Dasgupta, Mr. Jitendra Patnaik. For the Opposite Party/State : None. JUDGMENT SHAMPA DUTT (PAUL), J.: 1. The present revision has been preferred praying for quashing of Complaint Case No. CS/36744/19 under Section 200 of the Code of Criminal Procedure with charge under Section 276C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession of all books, records, documents and assets of the said company and to take immediate control of its transactions. 10. The respondent being the complainant lodged a complaint under Section 200 (a) of the Code of Criminal Procedure with charge under Section 276C (2) read with Section 278B of the Income Tax Act, 1961 against Vikash Metal and Power Limited (under liquidation), and the petitioners herein along with one Sri Kailash Chand Jain and Sri Vijay Kumar Jain, the other ex-directors of the said company. 11. The said complaint was filed in the month of August, 2019 before the Learned Chief Metropolitan Magistrate Court at Calcutta. 12. The said Sri Kailash Chand Jain filed a discharge petition before the Metropolitan Magistrate, 16th Court at Calcutta on 24th December, 2019 which is pending as of now. 13. From the materials on record the following facts are before this Court:- (i) It is stated that Vikash Metal and Power Limited (under liquidation), the Assessee has filed its income tax return for the Assessment Year 2010-11 on September 23, 2010; (ii) For the said Assessment Year, the assessment was completed in the regular course of action; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioners has submitted that the pursuant to the provisions of Section 446 of the Companies Act, 1956 (old Act) read with Rule 117 of the Companies (Court) Rules 1959 and/or pursuant to the provisions of Section 279 of the Companies Act, 2013 (new Act), when a winding up order has been passed or a provisional liquidator has been appointed, no suit or other legal proceeding shall be commenced against the company, except with the leave of the Tribunal. The relevant portion of Section 279 (1) of the Companies Act, 2013 is quoted below : When a winding up order has been passed or provisional liquidator has been appointed, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, by or against the company, except with the leave of the Tribunal and subject to such terms as the Tribunal may impose. 18. Consequent to such order dated September 8, 2015 all the directors of the said company (under liquidation) who were the Directors as on September 8, 2015 ceased to be directors and as such none of the ex-directors are allowed and/or authorized to take any steps either with regard to receiving of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Companies Act as well as under Income Tax Act. As such they are neither liable to be prosecuted nor liable to make any payment of any dues and/or demand of the department of Income Tax. In the above premises there is no question of any willful attempt in any manner whatsoever to evade payment of any tax on the part of the petitioners and/or Sri Kailash Chand Jain and Sri Vijay Kumar Jain, the other ex-directors. 22. That Vikash Metal and Power Limited (under liquidation) is a Public Limited Company and as such pursuant to the provisions of Section 179 of the Income Tax Act, 1961, the demand against a Public Limited Company shall not be recovered against its Directors. Hence, no proceedings can lie against the Directors or ex-Directors of a Public Limited Company, inter alia, against the petitioners and/or ex-directors. The relevant portion of Section 179 of the Income Tax Act, 1961 is reproduced below:- 179. [(1)] Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), where any tax due from a private company in respect of any income of any previous year or from any other company in respect of any income of any previous year during which such oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 279 of the Companies Act, 2013 to initiate proceedings against the said Company (under liquidation). 31. There is no willful attempt in any manner whatsoever to evade payment of tax on the part of the petitioners or on part of any ex-directors as provided under Sections 276C(2) of the Income Tax Act, 1961. 32. The respondent department should have filed the complaint, if any against the Official Liquidator attached to this Hon ble High Court for non appearance and/or non filing of written submissions with the department of Income Tax. 33. Since on and from September 8, 2015 the Official Liquidator is the whole and sole of Vikash Metal and Power Limited (under liquidation) there is no question of willful default on the part of the petitioners or to evade payment of tax as alleged by the respondent in its Complaint Case no. CS/39744/19. 34. Since the petitioners no more represent Vikash Metal and Power Limited (under liquidation), the continuation of the instant proceedings against them is an abuse of the process of law and/or to be quashed in the interest of justice. 35. In spite of due service there is no representation on behalf of the opposite party, Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquidator) shall, within thirty days after he has become such liquidator, give notice of his appointment as such to the Income-tax Officer who is entitled to assess the income of the company. (2) The Income-tax Officer shall, after making such enquiries of calling for such information as he may deem fit, notify to the liquidator within three months from the date on which he receives notice of the appointment of the liquidator the amount which, in the opinion of the Income-tax Officer, would be sufficient to provide for any tax which is then, or is likely thereafter to become, payable by the company- (3) The liquidator (a) shall not, without the leave of the Commissioner, part with any of the assets of the company or the properties in his hands until he has been notified by the Income-tax Officer under sub-section (2); and (b) on being so notified, shall set aside an amount, equal to the amount notified and, until he so sets aside such amount, shall not part with any of the assets of the company or the properties in his hands: Provided that nothing contained in this sub-section shall debar the liquidator from parting with such assets or properties f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss decisions or access the company s finances. Their role becomes one of assisting the liquidator in winding up the company s affairs. T his typically involves helping to locate and sell off assets, as well as liaising with creditors. 39. It is the case of the petitioners that since the Hon ble Court has directed the winding up of the company on 08.09.2015, everything related to the company is now in the custody of the official liquidator and as such the petitioners have no liability nor responsibility in respect of the affairs of the company. The proceedings against them should thus be quashed. 40. The total outstanding tax is Rs. 43,25,07,040, making an addition of Rs. 78,92,00,000/-. 41. The Income Tax Authorities admitted before this Court that they did not have knowledge of the winding up order dated 08.09.2015 and filed this case on 02.08.2019. 42. Admittedly, considering the present situation, the official liquidator is a necessary party before the trial court. Though the official liquidator is now in-charge of the affairs of the company, the petitioners being the erstwhile directors are to assist the official liquidator in affairs of the company even after wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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