TaxTMI 
TaxTMI 
1973 (9) TMI 78
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....lenging the order of the liquidator. Priority in payment was claimed on the allegation that the petitioner is a local authority and the amount represents the revenue payable by the company to the local authority. Petitioner is also a licensee for the supply of the electricity and the company was the consumer. Petitioner presented the bill for the energy consumed by the company for the months of April, May and June, 1967, in the aggregate amount of Rs. 4,141.69 and this amount was outstanding at the relevant date. The company had two independent connections, namely, ordinary consumer connection and connection for motive power. The break-up of the amount was as under : Motive power ... Rs. 2,278.74 Rs. 178.93 Electricity duty Light and fans ... Rs. 1,862.95 Rs. 450.90 Electricity duty. The amount of electricity duty thus payable by the licensee to the Government and to be collected from the consumer was Rs. 629.83. One Ramachandra Ganesh Padhya, Electrical Engineer, Petlad Nagar Palika, filed his affidavit-in-proof of the claim and claimed priority in payment. The liquidator accepted the clai....
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....ompany had commenced to be wound up voluntarily before that date. Therefore, the relevant date for the purpose of the present inquiry would be the date on which the winding-up order was made, namely, 26th June, 1967. In order to claim priority by invoking clause (a) of sub-section (1) of section 530, it must be shown that revenues taxes, cesses and rates due from the company to the local authority were due from the company at the relevant date and had become due and payable within 12 months next before that date. Now, there is no dispute in this case that the amount claimed by the petitioner was due at the relevant date and there is equally no dispute in this case that it had become due and payable within 12 months next before the relevant date. Controversy centres round the contention whether the amount claimed by the petitioner would be "revenue" payable by the company to the local authority. It is conceded that except the amount of. electricity duty included in the claim the balance of the amount was not the amount of any tax, cess or rate. But, it was contended that the amount represented the revenue of the local authority and it was payable by the company to the local autho....
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....istrict board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund. A municipality set up under the Gujarat Municipalities Act or deemed to have been set up under the Gujarat Municipalities Act would be a local authority and Petlad Nagar Palika is a municipality deemed to have been set up under the Gujarat Municipalities Act and, therefore, it is a local authority. It has obtained a licence for distribution and supply of electricity. Its electricity department is a part of the local authority and, therefore, it is not correct to say that electricity department of the Petlad Nagar Palika is not included in the comprehensive expression "local authority". Same conclusion can be reached by approaching the matter from a slightly different angle. The income of the electricity department could not be said to be an income of the department alone. It would be the income of the municipality. Income of one department of a municipality is the income of the municipality as a whole because one can envisage that one department may be a wholly spending department and another department may be....
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....f the State increased many-fold. Maintenance of law and order became secondary function of the State activity, primary activity being socio-economic justice to the citizens and just distribution of the national wealth and control of material resources of the community to be so distributed as to best sub-serve the common good and to prevent concentration of wealth and means of production in the hands of a few to the common detriment. Attempt was to set up an egalitarian society as conceived in the Directive Principles of State Policy enunciated in Part IV of our Constitution. To achieve this goal, the State had to undertake a number of industrial and commercial activities. Large amounts were spent on the planned industrial growth and the State itself became the biggest industrial magnate. State started earning income from its investment in industrial enterprises. Now, should the concept of revenue remain constant in this ever changing concept of activity of the State ? If the old and time-honoured concept of revenue was to be adhered to, obviously one would always refer back to the notion where revenue represented the income of the State for permitting use of land. Indisputably, con....
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....Registrar of Joint Stock Companies-a Central Government Officer-for the action taken by him in discharge of his official duty under section 138 by appointing Shaikh Din Mohammad to investigate the affairs of the Punjab Industrial Bank Ltd. was held not to be entitled to priority in payment. Thus, certain payment to Central Government may not be included in the expression "revenue". In Northern Bengal Co. Ltd., In re [1937] 7 Comp. Cas. 470 (Cal.), claim for priority was rejected observing that debt in respect of which priority is claimed is a trade debt and not entitled to priority.Thus, trade did not form part of the revenue of the Government. In K. Chandy v. Mysore State Electricity Board [1962] 32 Comp. Cas. 168 (Mys.), claim of the State Electricity Board and the State Housing Board for priority in payment was rejected. On the facts, the case is very much similar to the one before me. Debt in that case was due to the Director of Sericulture for supply of silk worm eggs to a silk manufacturing company. Priority was claimed on the allegation that debt was due to the department of the Government and it would constitute revenue of the Government. Claim for priority was rejected on ....
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.... is restricted to a sense analogous to a less general. The maxim ejusdem generis is only an illustration of the maxim noscitur a sociis (vide Dr. Devendra M. Surti v. State of Gujarat [1969] 1 S.C.R. 235 (S.C)). Where the intention of the legislature in associating wider words with the words of narrower significance is doubtful, or otherwise not clear, then the present rule of construction of noscitur a sociis can be usefully applied. It can only be applied where the meaning of the words of wider import is doubtful; but where the object of the legislature in using wider words is clear and free of ambiguity, the rule of construction in question cannot be pressed into service (vide State of Bombay v. Hospital Mazdoor Sabha [1960] 2 S.C.R. 866 (S.C.)). According to a well established rule used in the construction of statutes, general terms following particular ones apply only to such persons or things as are ejusdem generis with those comprehended in the language of the legislature (vide R. v. Cleworth [1864] 4 B. & S. 927, per Cockburn C. J. at page 932). In other words, it would mean that the general expression is to be read as comprehending only things of the same kind as that desi....
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....e right to claim priority in respect of its tax dues (vide Builders Supply Corporation v. Union of India [1965] 56 I.T.R. 91 (S.C.)). In Bank of India v. John Bowman A.I.R. 1955 Bom. 305, Chagla C. J. (as he then was) observed that the priority given to the Crown is not on the basis of its debt being a judgment-debt or a debt arising out of statute, but the principle is that if the debts are of equal degree and the Crown and the subject are equal, the Crown right will prevail over that of the subject. The obiter observation of the Madras High Court in Manickam Chettiar v. Income-tax Officer, Madura [1938] 6 I.T.R. 180 (Mad.) [F.B.] was disapproved by observing that the weight of authority in support of the applicability of the common law doctrine in regard to tax dues in this country is so strong that no significance can be attached to these obiter observations. In Collector of Aurangabad v. Central Bank of India 11968] 21 S.T.C. 10 (S.C.), observation of Chagla C. J. hereinabove quoted was approved, observing that the English common law doctrine of the priority of Crown debts has been given recognition in the territory known as British India prior to 1950 in regard to the recovery....
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....o priority in payment. That would be complete antithesis of the old concept of revenue which meant payment to the Government for the use of the land on the footing that all lands belong to the State. Legislature has however, manifested its intention in not leaving the word "revenue" standing by itself but the same has been followed by more specific words such as taxes, cesses and rates General expression has been followed by words of specific connotation and there is nothing in the language of sub-clause (a) which would mean that the legislature used the word "revenue" in its widest amplitude and did not want its meaning to be cut down. Even collection of tax when it goes to the coffers of the State, it would constitute "revenue" of the State, so also collection of the cess and rates. If by using the expression "revenue" Parliament wanted to provide for priority for income derived by the State from whatever source, it was absolutely not necessary to use the words "taxes, cesses and rates" following the word "revenue". But it appears that the legislature wanted to completely manifest its intention by providing that the word "revenue" shall be understood in the narrower sense though ....