https://www.taxtmi.com/caselaws?id=97791 Income-tax authorities could not set off a refund payable to a company in liquidation against tax dues already proved in liquidation as an ordinary unsecured claim. Once the tax demand had been admitted and certified in the winding-up process, it became subject to the company-law scheme for pari passu distribution among unsecured creditors, and the Department could not bypass that process through the Income-tax Act recovery machinery. The Court applied the principle that the Crown has no prerogative priority in liquidation except as expressly preserved, and that statutory set-off cannot secure preferential payment of an unsecured debt outside the insolvency framework. The refund was therefore payable without adjustment against the proved tax claim. en-us Wed, 22 Feb 1961 00:00:00 +0530 Wed, 18 Jan 2012 11:06:14 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=97791 Income-tax authorities could not set off a refund payable to a company in liquidation against tax dues already proved in liquidation as an ordinary unsecured claim. Once the tax demand had been admitted and certified in the winding-up process, it became subject to the company-law scheme for pari passu distribution among unsecured creditors, and the Department could not bypass that process through the Income-tax Act recovery machinery. The Court applied the principle that the Crown has no prerogative priority in liquidation except as expressly preserved, and that statutory set-off cannot secure preferential payment of an unsecured debt outside the insolvency framework. The refund was therefore payable without adjustment against the proved tax claim. Case-Laws Companies Law Wed, 22 Feb 1961 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=97791