INCOME TAX OFFICER Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THIS company application has come to us on a reference made by our learned brother, A. Sambasiva Rao J.

(2.) THE facts in outline are that Sri Ramalingeswara Crushing Mills Company (Private) Ltd. is in liquidation. THE Income-tax Officer, B-Ward, Company Circle, Hyderabad, submitted a claim for Rs. 4,028.50 as against the company in liquidation. THE said sum is due to the income-tax department in respect of assessment years 1951-52, 1952-53 and 1955-56. Recovery proceedings were initiated to recover the amounts of tax assessed. Properties of the company were attached in 1958. As the winding-tip order was passed by the High Court, the recovery proceedings were suspended. Subsequent to the winding-up order, the Income-tax Officer claimed that the said amount due from the company should be accepted as preferential claim and paid.

(3.) IT is perhaps relevant to notice that before the Companies Act was enacted, a Company Law Committee was constituted. In paragraph 219 of their report, the Committee said :