Final income-tax penalty orders bind liquidation, but fresh penalty proceedings need leave before enforcement

Final income-tax penalty orders that had been passed before liquidation and not challenged in appeal remained binding on the official liquidator, who could not reopen them collaterally in winding-up proceedings; the corresponding claim was therefore admissible. A penalty proceeding commenced after the winding-up order, however, required leave of the company court and notice to the official liquidator, and in the absence of such leave the resulting liability could not be enforced against the company in liquidation; that claim was excluded from admission.

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Issues: (i) whether penalty orders under the income-tax law, passed before the company went into liquidation and not challenged in appeal, could be reopened or ignored by the official liquidator; (ii) whether a penalty order passed after the winding-up order, without leave of the company court, could be enforced against the company in liquidation.

Issue (i): whether penalty orders under the income-tax law, passed before the company went into liquidation and not challenged in appeal, could be reopened or ignored by the official liquidator.

Analysis: Penalty imposed under the income-tax law was treated as part of the tax liability. Once the assessment or penalty order had been made by the income-tax authority and no appeal had been pursued, the order attained finality. In liquidation proceedings, the official liquidator could not go behind such final orders and question the liability through a collateral process. The proper course for disputing the levy was the machinery provided by the taxing statute itself.

Conclusion: The pre-liquidation penalty orders were binding and the claim based on them was admissible.

Issue (ii): whether a penalty order passed after the winding-up order, without leave of the company court, could be enforced against the company in liquidation.

Analysis: After the winding-up order, no legal proceeding could be commenced or continued against the company except with leave of the court. Proceedings under the income-tax law fell within the scope of that prohibition. As no leave had been obtained and no notice had been given to the official liquidator, the post-liquidation penalty order could not be enforced in the winding-up proceedings.

Conclusion: The post-liquidation penalty claim was not entertainable.

Final Conclusion: The claim was allowed only to the extent of the penalty liabilities fixed before liquidation, while the later penalty claim was excluded from admission in the winding-up estate.

Ratio Decidendi: Final income-tax penalty orders that have attained conclusiveness cannot be reopened by the official liquidator in liquidation proceedings, but any proceeding to enforce a fresh liability against a company in liquidation requires compliance with the statutory leave requirement governing winding up.

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