SALES TAX OFFICER KANPUR Vs. OFFICIAL LIQUIDATOR ALLAHABAD

JUDGEMENT

(1.) THIS special appeal arises out of an application under rule 164 of the Companies Rules, 1959, and has been filed by the Sales Tax Officer.

(2.) AN order for winding up of Messrs. Northern India Oil Industries was made by this court on 7th August, 1963. The company was in arrears of sales tax to the tune of Rs. 22,468.88 for the assessment years from 1954-55 to 1959-60. A claim for priority of this arrear was made under section 530(1) of the Companies Act. The Official Liquidator accepted the claim for priority in respect of arrears of some of the years, but rejected the claim in respect of arrears for the assessment years 1954-55 to 1958-59, on the ground that these arrears had not become due within twelve months before the date of the winding up order, i.e., between 7th August, 1962, and 7th August, 1963. An appeal filed to the Company Judge was rejected qua the claim for priority. The Sales Tax Officer has now appealed against this part of the order of the learned single Judge. Section 530(1)(a) of the Companies Act, 1956, under which the claim for priority has been made, is as under :

(3.) THE mere adoption of a similar mode of recovery for taxes and revenue arrears does not transmute taxes into revenues for the purposes of section 530. Although all taxes are part of revenue in the generic sense, it appears that section 530 has treated them separately, inasmuch as apart from mentioning taxes, cesses and rates, it also mentions revenue separately thereby indicating that the legislature used the word "taxes" as distinct from revenue, cesses and rates. The word "revenue" as used in the section as such has to be interpreted in a restricted sense, as excluding taxes, cesses and rates, which are specifically mentioned in the section.