(1.) THIS is a reference under Chapter V, Rule 2, of the Original Side Rules of a question of law under the Bengal Finance (Sales Tax) Act, 1941, read with the Indian Companies Act. The learned referring Judge, Banerjee, J., has framed the question in the following words :- "Whether sales tax is to be treated as a preferential debt within the meaning of Section 230 of the Indian Companies Act - from which date ? From the date of demand or the date when the sale price is received, or any other date ?" The question is not very precisely worded, but its true nature, or that of so much of it as is involved in the present case, will appear from the following facts.
(2.) ON the 23rd May, 1950, certain creditor of a private limited company, called Messrs Recols (India) Ltd., applied for its liquidation and the application was admitted on the 25th May, 1950, when an order for the appointment of a provisional liquidator was also made. A winding-up order was next made on the 18th July, 1950, and Mr. S. N. Bhattacharya, a Barrister-at-Law practising in this Court, was appointed Official Liquidator. The Liquidator had the list of creditors settled and made some realisations and at that stage a certificate, demanding payment of a sum of Rs. 760-10-9 as arrears of sales tax due from the company for the four quarters ending on the 31st March, 1948, was served on him. As far as it appears from the papers before us, the Sales Tax Authorities did not previously make any attempt to prove their claim in the liquidation. The assets of the company are sufficient to pay the preferential creditor in full, including the Sales Tax Authorities, if they are allowed to rank as such, but the Official Liquidator thought that they were not entitled to any preferential payment, but only entitled to share in the distribution as unsecured creditors. Accordingly, on the 8th May, 1952, he took out a master's Summons in respect of an application to be made by him to the Court for directions in regard to the payment of the sales tax demand and other directions. The application came to be heard be Banerjee, J., who made the present reference.
(3.) AS already stated, the Official Liquidator contends that no preferential payment of the amount of the certificate can be claimed. Whether that view is right, depends on the true effect of Section 230(1)(a) of the Indian Companies Act on the facts of the present case. That section is expressed in the following terms :-