TaxTMI 
TaxTMI 
2008 (1) TMI 610
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....er on payment of balance consideration money and the applicant should not be held up for delay and/or non payment of pre-winding up dues of land in question ; (B)That this hon'ble court may be pleased to direct the official liquidator as well as the Land Revenue Department to take all necessary steps to inform the applicant the dues on the concerned land on and from the date of passing of the order of the winding up and with further direction that on payment of all dues from the date of passing of the winding up order all entries and charges in the land Revenue records on the concerned land be removed in order to enable the petitioner to deal with and/or use the concerned land for setting up the project free from encumbrances." An affidavit in support of judge's summons is filed by Shri Satishbhai Trivedi, an authorised officer of the applicant-company. It is stated therein that by order dated June 16, 2005, made by this court in Company Petition No. 261 of 2004, the company in liquidation was ordered to be wound up and the official liquidator attached to this court was appointed as its liquidator. The official liquidator issued advertisement inviting bids for the sale of lan....
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....id order dated October 18, 2007, passed by this court in Company Applications Nos. 478 and 479 of 2007, the applicant filed O.J. Appeals Nos. 238 and 239 of 2007 before the Division Bench of this court and the Division Bench vide its order dated October 25, 2007, allowed the said appeals and granted permission as prayed for. The applicant thereafter has taken inspection of the assets sold to the applicant and has also taken inspection of the revenue records in respect of the subject land. Upon perusal of the revenue records and in particular extracts of Village Form No. 7/12 the applicant has found that there is mutation of charge of the Sales Tax Department in respect of the sales tax dues against the company in liquidation as also charge on account of land Revenue. Keeping in view the aforesaid mutation made in the revenue records, the bank which was to grant financial assistance to the applicant has started showing reluctance to extend the financial assistance to the applicant over the subject land in view of mutation of the charge of the Department of Sales Tax as also charge in respect of the land revenue. In the above background present two applications have been filed by ....
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....winding up dues of subject. He has further submitted that the applicant needs to create charge on the said land after payment of the aforesaid sum in order to set up the factory but no bank and/or financial institution will render any financial assistance to the applicant in case the charge mentioned in the land revenue report is not removed. He has, therefore, requested this court to pass a declaratory order to the effect that on payment of balance consideration money and on payment of all dues in terms of tender documents by the applicant from the date of passing of the winding up order on the subject land, the land will be free from all encumbrances and charges and the applicant shall be free to deal with the subject land. Mr. Pahwa has further submitted that as per the provisions contained in sections 529 and 529A of the Companies Act, 1956, only secured creditors and workmen are having pari passu charge over the assets of the company. They are to be paid in priority to all other debts. Section 530 of the Act deals with preferential payment and sub-section (1)(a) thereof states that in a winding up (subject to the provision of section 529A), they shall be paid in priority to....
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....Once the liquidator sells the properties from the realisation of the assets of the company to be paid to the creditors in order of preference. The court further held that the purchaser of the property from a liquidator of the company in winding up is not liable to pay the taxes for the period previous to his purchase. All claims before the purchase will have to be filed before the official liquidator and it is for the liquidator to consider the priority of the claim in accordance with the provisions of the Companies Act, 1956. Mr. Pahwa further relied on the decision of this court rendered on June 13, 2006, in Company Application No. 235 of 2005 in the case of Assistant Commissioner of Income-tax v. Official Liquidator of Minal Oil and Industries Ltd. [2007] 136 Comp Cas 399 ; [2007] 290 ITR 643, wherein it was held that considering the proviso to section 178(3) of the Income-tax Act, 1961, read with section 530 of the Companies Act, 1956, the applicant is not entitled to any relief as prayed for and the application is required to be rejected by holding that the claims of the secured creditors as envisaged under section 529 of the Companies Act would have a preference/priority o....
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....further relied on the decision of the Bombay High Court in the case of Secretary of State v. Vedavyas Venkatesh Bhatta, AIR 1936 Bom 213, wherein it is held that section 137 gives priority to the claims of the Government, which is more extensive than the common law prerogative, since it creates a right to priority over all debts of every kind whether secured or unsecured. It is, however, to be read with section 151, which restricts the prerogative by confining the preference given or declared by section 137 to demands for the current year. Mr. Mehta further invited court's attention to the relevant provisions of Bombay Land Revenue Code, 1879. Section 137 deals with the claims of the State Government to have precedence over all others. It says that the claim of the State Government to any moneys recoverable under the provisions of this Chapter, shall have precedence over any other debt, demand, or claim whatsoever, whether in respect of mortgage, judgment-decree, execution or attachment or otherwise howsoever, against any land or the holder thereof. He further invited the court's attention to the provision contained in section 151, which deals with revenue demands of former year....
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.... respective parties and having gone through the relevant statutory provisions and decided case law on the subject as well as the terms and conditions of the tender document, the court is of the view that this is a case where the court has to show its indulgence even at this stage. As far as payment of land revenue charges are concerned, Mr. N.K. Pahwa, learned advocate, appearing for the applicants has fairly submitted that the applicants will pay the said charges to the land revenue authority and hence, they will not press this ground so far as payment of land revenue charges is concerned. The only question which requires consideration of this court is with regard to the payment of sales tax arrears. Before dealing with the rival contentions raised by the parties before the court, it is necessary to have a close look at clause 15 of the terms and conditions of the sale. It says that the purchaser shall be liable to pay all the statutory dues, if any, due and payable on the properties of the subject company for the period after the date of winding up order. The payment of such dues for pre-liquidation period shall be settled as per the provisions of the Companies Act, 1956. However....