D.K. Mehta, J. was unable to agree with the companyclusion reached by D.A. Desai, J. and hence the matter was referred to a Division Bench to have the entire question decided along with O.J. Appeal No.
19,862.87 being the amount of sales tax due and payable under the Bombay Sales Tax Act for the period from January 1, 1966 to June 26, 1967, would number be entitled to priority in payment.
The three companyditions are Debt of the kind mentioned in the clause must be outstanding on the relevant date The debt must have become due, in the sense that it must have been incurred at any time within the twelve months next before the relevant date and The debt must have payable at any time within the twelve months next before the relevant date.
42,143.83 priority in payment was claimed for the amount of Rs.22,280.96 on the submission that the claim represented the claim for tax payable to the State Government as it was due on the relevant date and had become due and payable within 12 months next before the relevant date, and therefore, it was entitled to a priority in payment as envisaged by section 530 1 a of the Companies Act.
2 of 1973 before the Company Judge claiming priority in respect of certain dues.
It was companyceded that balance of the admitted claim in the amount of Rs.
The balance amount as dues was directed to rank as ordinary debts without any priority, since the relevant orders were passed after the date of the winding up order.
Pursuant to this invitation the Sales Tax Officer, Petlad submitted a companyprehensive claim in the sum of Rs.
11,216.50 being the amount of sales tax payable under the Central Sales Tax Act for the period from July 1, 1957 to December 31, 1965, because the assessment order was made in respect of the aforementioned claim within a period of 12 months next before the relevant date and the numberice of demand which made the tax payable was also issued within a period of 12 months next before the relevant date.
The judgment of the D.R. Desai, J. is reported as Sales Tax Officer, Petlad v. Rajratha Naranbhai Mills Co. Ltd. Another, 1974 Vol.
The liquidator after obtaining directions of the Court invited the creditors of the companypany to prove their debts or claims and simultaneously to establish any title they may have to priority under section 530.
It was urged on behalf of the Sales Tax Officer that out of the admitted claim in the amount of Rs.42,143.83, the liquidator was in error in number granting priority in payment of debt of Rs.22,280.96 companysisting of Rs.11,064.46 being sales tax payable by the companypany for the period from April 1, 1957 to December 31, 1965, under the Bombay Sales Tax Act and balance of Rs.
Appeal by Certificate from the Judgment and Order dated 15.10.1975 of the Gujarat High Court O.J. Appeal No.
The Sales Tax Officer took the matter in appeal before the Company Judge under Rule 164 of the Companies Court Rules, 1959 which was heard by D. A. Desai, J. as he was in the Gujarat High Court .
The Company Judge, B. Mehta, J. was engaged to determine the same question.
To companyclude, the learned Judge observed that the tax becomes due when taxing event occurrs and number when assessment orders passed and that the claim for priority was rightly negatived by the liquidator because even though amount for which priority was claimed was the amount of tax arrears that became payable at the time of making assessment orders after giving credit for what was paid alongwith return, yet it was due for a period much prior to 12 months next before the relevant date and even if it had become payable on the assessment order being made and demand numberice being issued, as both the companyditions did number companyexist and were number satisfied, claim for priority had been rightly nagatived by the official liquidator requiring numberinterference in his order.
The appeal on that score was rejected but was allowed to the extent of a small amount of Rs.1225.36 being the amount of penalty under the Bombay Sales Tax Act and the Central Sales Tax Act upto the relevant date and the liquidator was directed to admit the said claim over and above the claim admitted by him.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
In the meantime in another case of Baroda Board Paper Mills Ltd., a companypany in liquidation, the Income Tax Officer filed Company Application No.
The appellant company was ordered to be wound up by an order of Court made on June 26, 1967.
The claim of the Sales Tax Officer to the recovery of penalty in liquidation proceedings was negatived because the demand was held to be without application of mind as to whether there was reasonable cause for the official liquidator for number paying the amount.
The Judgment of the High Court is reported as Baroda Board Paper Mills Ltd. in Liquidation v. Income Tax Officer etc.,
44, Company Cases 65.
It was urged that apart from any other companysideration the petitioner is entitled to a priority in payment for the amount of Rs.22,280.96 as the claim was of sales tax which was due on the relevant date and which became due and payable within 12 months next before the relevant date.
Dushyant Dave, Anip Sachthey and Ashish Verma for the Respondent.
Datta, P.H. Parekh and J.P. Pathak for the Appellant.
The liquidator rejected the claim for priority in its entirety, but admitted claim to the tune of Rs.42143.63 payable as debt paripassu with other unsecured creditors of the companypany.
An intra Court Appeal was preferred by the Sales Tax Officer, Petlad in the High Court.
2 of 1975.
The Judgment of the Court was delivered by PUNCHHI, J. What is the ambit of the States claim to priority in relation to revenues, taxes, cesses and rates, due from a companypany in liquidation, is the question which stands posed in this appeal by certificate, granted by the High Court of Gujarat, in O.J. Appeal No.
2 of 1975.
70945.60 as the amount of sales tax plus penalty payable by the companypany and claimed priority for the whole amount.
It would appeal that from the claim admitted as payable by the liquidator to the extent of Rs.
196.42 had been rightly rejected.
It was also companyceded that the claim for an amount of Rs.
