K T C TYRES INDIA LTD Vs. STATE

JUDGEMENT

(1.) These reports have been placed before us on a reference made by the learned Single Judge in view of the importance of the questions raised. The matter arises in connection with the liquidation proceedings of M/s. K.T.C. Tyres (India) Ltd., M/s. Hendez Electronics Ltd. and M/s. Venad Pharmaceuticals and Chemicals Ltd. For the convenient sake we may refer to Report No. 58 in connection with M/s. K.T.C. Tyres (India) Ltd. Statement and reply statement has been filed by the contesting parties in that case. In the report Official Liquidator prayed for the following reliefs.

(2.) We may refer to the facts in Report No. 58 which is as follows: The Company M/s. K.T.C. Tyres (India) Ltd. was ordered to be wound up by the Company Court as per Order dated 22.1.1993. During the pendency of liquidation Official liquidator had disposed of all the movable and immovable assets by public auction and obtained total sum of Rs. 1,78,37,000/- in May, 1996. Full consideration was received by the Official Liquidator. Entire assets of the Company in liquidation have been charged to Canara Bank, Calicut and Industrial Development Bank of India, IDBI Tower, Cuffe Parade, Mumbai. During the course of the winding up proceedings, Official Liquidator had settled the list of creditors and the total amount admitted to the secured creditors and workmen creditors would come to Rs. 12,57,12,181/-. Out of the admitted amount, the Official Liquidator had paid first dividend of 16 paise in a rupee to the secured creditors and workmen creditors amounting to Rs.1,99,22,706/- vide order dated 17.2.1998 in M.C.A. No. 31 of 1998 in C.P. No. 19 of 1992.

(3.) The Company in liquidation had filed return of income regularly upto the assessment year 1999-2000. The Company had not earned any income till the assessment year 1996-1997. On the sale of the immovable properties of the Company, a sum of Rs. 1,78,37,000/- was received by the Official Liquidator. The stand of the Official Liquidator is that payment of income tax, capital gain tax, advance tax and additional tax is to be considered only after satisfying the dues of the secured creditors and workmen.