Finality of tax assessments: unchallenged Income-tax penalties are provable in liquidation, but post-winding orders without notice are not.

Finality of Income-tax assessments and penalties is emphasised: unchallenged assessments and penalty orders made before winding up are provable in liquidation and cannot be reopened by the official liquidator, applying the statutory remedy under the Income-tax Act. Conversely, orders or proceedings that take place after a winding up order without court leave or notice to the official liquidator fall under the winding-up bar and are not enforceable or admitted in the liquidation. The petition was allowed in part: pre-winding penalties admitted; post-winding penalty claims rejected.

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Issues: (i) Whether penalty orders under the Income-tax Act passed prior to winding up can be questioned by the official liquidator; (ii) Whether a penalty order passed after the winding up order but without notice to the official liquidator can be enforced or admitted by the official liquidator.

Issue (i): Whether penalty orders under the Income-tax Act passed prior to winding up can be reopened or questioned by the official liquidator.

Analysis: The Court examined authorities establishing that assessments and penalty orders determined under the Income-tax Act are to be dealt with by the statutory machinery provided by that Act and attain finality when not challenged by appeal. Prior decisions confirm that courts and other tribunals should not go behind final tax assessments for the purpose of liquidation proofs where the Income-tax Act provides the remedy.

Conclusion: The penalty orders passed prior to the company's winding up are final and must be admitted; conclusion in favour of Revenue.

Issue (ii): Whether a penalty order passed after the winding up order without notice to the official liquidator can be entertained by the official liquidator.

Analysis: The Court applied the statutory bar in winding up proceedings which restrains commencement or continuation of proceedings against the company after a winding up order except by leave of the court. A penalty order made after the winding up order, without notice to or leave involving the official liquidator, cannot be enforced in the liquidation.

Conclusion: The penalty order passed after the winding up cannot be admitted; conclusion in favour of Assessee.

Final Conclusion: The petition is partly allowed and the petitioner's claim is to be admitted in part while the claim based on the post-winding up penalty is rejected.

Ratio Decidendi: Penalty orders and tax assessments determined under the Income-tax Act, when final and unchallenged, are provable in liquidation and cannot be reopened by the official liquidator, but proceedings or orders affecting the company made after a winding up order without court leave or notice to the official liquidator are not enforceable in liquidation.

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