Bombay High Court
The State Of Maharashtra Through The ... vs The Official Liquidator Of Devidayal ... on 5 July, 2024
Author: Abhay Ahuja
Bench: Abhay Ahuja
3. IA1809-19 in CP 144-19.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION NO. 1809 OF 2019
IN
COMPANY PETITION NO. 144 OF 2019
The State of Maharashtra through
the Sales Tax Officer ...Applicant
In the matter between
Mukund Ltd. ...Petitioner
V/s.
The Official Liquidator of Devidayal Industries Ltd. ...Respondent
Mr. Himanshu Takke, AGP for the Applicant-State.
Ms. Apurva Thipsay, for Official Liquidator.
Ms. Nikita Yadav, Assistant Official Liquidator present.
CORAM : ABHAY AHUJA, J.
DATE : 5th JULY, 2024
P.C. :
1. Pursuant to the orders of this Court, today when the matter is called out, Mr. Takke, learned AGP for the State appears and submits that he has received copy of the reply and has instructions not to file rejoinder. Accordingly, this Court proceeds with the hearing of the Digitally signed by NIKITA NIKITA YOGESH matter.
YOGESH GADGIL GADGIL Date:
2024.07.05 19:15:46 +0530
2. Mr. Takke, submits that although in the claim lodged with the Official Liquidator on the basis of the assessment order claiming Rs. 9,38,721/- consisting of tax, interest and penalty, the Official Liquidator adjudicated the claim only for Rs. 3,20,637/- as preferential claim, Nikita Gadgil 1/5 ::: Uploaded on - 05/07/2024 ::: Downloaded on - 17/07/2024 15:24:36 :::
3. IA1809-19 in CP 144-19.doc which is the amount of tax alone and not the interest and penalty, therefore, this appeal/application has been filed seeking quashing of the said order and in the alternative allowing the entire claim of the Applicant as per the assessment order dated 22 nd February, 2017 being the statutory entitlement of the Applicant, who is State of Maharashtra through the Sales Tax Officer.
3. Mr. Takke, learned AGP also draws the attention of this Court to Section 528 of the Companies Act, 1956 to submit that in every winding up, all claims against the company, present or future, shall be admissible to proof against the company and that, therefore, since the adjudicated claim against the company in liquidation does not only contain tax but also interest and penalty, the Official Liquidator ought to have admitted the entire amount of tax.
4. Mr. Takke also refers to Section 530 of the Companies Act, 1956 with regard to preferential claims and submits that apart from the payments to be made as per Section 529A, all revenues, taxes, cesses and rates due from the company to the Central or to the State Government, etc. shall be paid in priority to all other debts and that, therefore, also the Official Liquidator ought to have paid the entire Nikita Gadgil 2/5 ::: Uploaded on - 05/07/2024 ::: Downloaded on - 17/07/2024 15:24:36 :::
3. IA1809-19 in CP 144-19.doc claim including interest and tax and not just the tax amount and that therefore, this Court set aside the order of the Official Liquidator.
5. On the other hand, Ms. Thipsay, learned Counsel appearing for the Official Liquidator submits that the reply has been filed where it has been stated that the amount of tax of Rs. 3,20,637/- has been allowed as preferential claim against the claim for Rs. 9,38,721/- as under
Section 530 only tax has to be paid and not interest or penalty.
6. In support of her contention, Ms. Thipsay draws the attention of this Court to a decision of this Court (Coram: S.N. Variana, J, as his Lordship then was) in the case of Assistant Commissioner of Income Tax Vs. A. K. Menon, Custodian and Ors. 1 submitting that the Court while considering Section 11 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (the "Special Courts Act") and in particular the word 'taxes' as used therein has observed that the term tax has been defined under the Income Tax Act under Section 2(43) to mean income tax chargeable under the provisions of the tax in relation to an assessment year and that not penalty or interest.
1 1995 SCC Online Bom 55 Nikita Gadgil 3/5 ::: Uploaded on - 05/07/2024 ::: Downloaded on - 17/07/2024 15:24:36 :::
3. IA1809-19 in CP 144-19.doc
7. Ms. Thipsay would submit that it has also been observed that the term tax, penalty and interest are conceptually different and that priority has been given only to tax and nothing else. Learned Counsel submits that the language used in Section 11(2)(a) of the Special Courts Act is identical to the language used in Section 530 (1)(a) of the Companies Act, 1956, which refers to "all revenues, taxes, cesses and rates due from.......". That if this court has already interpreted the word 'taxes' in the decision cited above, the same interpretation would apply to the word 'taxes' in Section 530 (1)(a) and that would not include interest or penalty. Learned Counsel would submit that therefore, the Official Liquidator has correctly allowed the preferential claim in respect of the tax amount of Rs. 3,20,637/- and not the balance amount which consists of interest and penalty as claimed by the Applicant.
8. It is submitted that the amount of tax that had been adjudicated as preferential payment by order dated 24 th April, 2019, has already been paid to the Applicant. Mr. Takke also confirms the same. Nikita Gadgil 4/5 ::: Uploaded on - 05/07/2024 ::: Downloaded on - 17/07/2024 15:24:36 :::
3. IA1809-19 in CP 144-19.doc
9. However, Mr. Takke, learned AGP seeks some time to consider the aforesaid decision in the case of Assistant Commissioner of Income Tax Vs. A. K. Menon, Custodian and Ors. (supra).
10. Accordingly, at his request, list on 19th July, 2024 on the supplementary board.
(ABHAY AHUJA, J.) Nikita Gadgil 5/5 ::: Uploaded on - 05/07/2024 ::: Downloaded on - 17/07/2024 15:24:36 :::