SALES TAX OFFICER KANPUR Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THE Sales Tax Officer, Kanpur, has filed this application under rule 164 of the Companies (Court) Rules, 1959, appealing against the decision of the official liquidator refusing his claim. It is not disputed that on the application of the Registrar of Companies, U.P., dated the 24th of May, 1962, an order for the winding-up of M/s. Northern India Oil Industries was made by this court on 7th August, 1963. The appellant filed a claim for Rs. 22,468.88 against the said company before the official liquidator on account of the arrears of sales tax (both Central and State) due from the former as per the following details:-

(2.) IN support of the aforesaid claim, the Assistant Sales Tax Officer of Kanpur Circle appeared before the official liquidator, and filed the relevant orders of the Sales Tax Officer along with copies of the assessment orders and copies of the acknowledgments in token of the receipt of the assessment orders and demand notices by the company. The official liquidator accepted the claim in respect of the first six items, but rejected to give them priority under section 530(1) of the Companies Act. He also rejected the claim for the last two items on the ground that the assessment orders on which they were based were made without any notice to him. Feeling aggrieved, the Sales Tax Officer has preferred the aforesaid appeal. On behalf of the appellant, his learned counsel Sri T. N. Sapru challenged the correctness of the findings of the official liquidator on both the points. So far as the question of priority was concerned, his contention was of a two-fold nature. His first contention was that, on a correct interpretation of section 530(1)(a) of the Companies Act, the sales tax in question was entitled to priority. His second contention was that, in any case, as the said sales tax had been ordered to be recovered as arrears of land revenue within the twelve months next preceding the date of the winding-up order, it was entitled to priority as land revenue. As for the claim for the last two items which was totally disallowed by the official liquidator, his contention was that as under section 17 of the Sales Tax Act, the legality and correctness of an assessment order could not be challenged in any other manner except that provided in that Act and as the official liquidator had not got the assessment order in question set aside under the Act he was in error in rejecting the appellant's claim in respect of those items. After hearing Sri Sapru and the official liquidator, I am satisfied that while the second contention of Sri Sapru is well founded, his first contention has no merit and is liable to be rejected. I shall, therefore, proceed to deal with those contentions in the order stated above.

(3.) CLAUSE (c) of sub-section (8) states: "(c) the expression 'the relevant date' means - (i) in the case of a company ordered to be found up compulsorily, the date of the appointment (or first appointment) of a provisional liquidator, or if no such appointment was made, the date of the winding-up order, unless in either case the company had commenced to be found up voluntarily before that date;". As stated earlier, it is not disputed that the relevant date in this case is the 7th of August, 1963. We have, therefore, to see whether the sales tax claimed under the assessment orders for the assessment years 1954-55 to 1958-59 can be held to have become due and payable within the twelve months next before the 7th August, 1963, that is, to say between the 7th August, 1962, and the 7th of August, 1963.