MORNING STAR P LTD Vs. STATE

JUDGEMENT

(1.) This is a petition by the Income Tax Officer, Company Circle, Trivandrum under S.439 of the Companies Act, 1956 (hereinafter referred to as the 1956 Act) read with S.433 and 560(5)(b) and 560(6) thereof, to wind up an incorporated company by name Morning. Star (Private) Ltd. The company was assessed to income tax by the petitioner for the assessment years 1957-58 to 1963-64 both inclusive. It did not pay the tax due under these assessments; and penalties were imposed for default by the petitioner. A sum of Rs. 59,460-42 is now due from the company under the aforesaid assessments by way of arrear of tax, interest thereon and penalties imposed for non payment of tax. The petitioner issued several notices calling upon the company to pay the above amount; but he did not succeed in recovering anything. This petition has, therefore been filed to wind up the company.

(2.) It appears that the company was not carrying on business for sometime; and the Registrar of Companies took action under S.560 of the 1956 Act. The name of the company was struck off the register, and the Registrar of Companies published a notice thereof in the Gazette of India dated 28 8 1965. This application is resisted by one of the shareholders, who was a director of the Company. According to him, the company was carrying on the business of passenger transport; and due to the nationalisation of that business, the company lost all its business. Hence it was struck off the register, and dissolved under S.560 (5) of the 1956 Act. He contends that this petition is not maintainable as the company has ceased to exist consequent on the dissolution.

(3.) The question for decision is whether a company which has been struck off the register and dissolved under S.560 (5) of the 1956 Act can be wound up. The learned counsel for the petitioner contends that clause (b) of the proviso to S.560(5) applies to the case; and the company is liable to be wound up, even though it has been struck off the register and dissolved. Sub-s.(6) of S.560 empowers a court to order the name of the company, which has been struck off the register, to be restored to the register on the application of the company or any member or the creditor thereof if the court is satisfied that the company was, at the time of striking off carrying on business or in operation or otherwise that it is just that the company be restored to register. It is not disputed that, if the company is thus restored to register, it can then be wound up. But the contention is that the company was not carrying on business or in operation at the time of striking off, and that there are no grounds justifying the restoration of the company to the Register. Sub-ss.(5) and (6) of S.560 read as follows: