16. Definitions
In this chapter,-
(a) “appropriate authority” , in relation to a company,
means the authority competent to assess tax on
the company;
(b) “company” and “private company” have the
meanings respectively assigned to them by clauses
[i] and [iii] of sub-section[1] of section 3 of the
Companies Act, 1956 [1 of 1956].
17. Company in liquidation
(1) Every person,-
(a) who is the liquidator of any company which is
being wound up, whether under the orders of a
court or otherwise; or
(b) who has been appointed the receiver of any
assets of a company (herein after referred to as
the liquidator) shall, within thirty days after he
has become such liquidator, given notice of his
appointment as such to the appropriate
authority.
(2) The appropriate authority shall, after making such inquiry or
calling for such information as it may deem fit, notify to the
liquidator within three months from the date on which he
receives notice of the appointment of the liquidator the
amount which, in the opinion of the appropriate authority
would be sufficient to provide for any tax which is then, or
is likely thereafter to become payable by the company.
(3) The liquidator shall not part with any of the assets of the
company or the properties in his hands until he has been
notified by the appropriate authority under sub-section[2]
and on being so notified, shall set aside an amount equal to
the amount notified and, until he so sets aside such
amount, shall not part with any of the assets of the
company or the properties in his hands;
Provided that nothing contained in this sub-section shall
debar the liquidator from parting with such assets or
properties in compliance with any order of a court or for the
purpose of the payment of the tax payable by the company
under this Act or for making any payment to secured
creditors whose debts are entitled under law to priority of
payment over debts due to Government on the date of
liquidation or for meeting such costs and expenses of the
winding up of the company as are in the opinion of the
appropriate authority reasonable.
(4) If the liquidator fails to give the notice in accordance with
sub-section(1) or fails to set aside the amount as required
by, or parts with any of the assets of the company or the
properties in his hands in contravention of the provisions of
sub-section[3] he shall be personally liable for the payment
of the tax which the company would be liable to pay:
Provided that if the amount of any tax payable by the
company is notified under sub-section[2], the personal
liability of the liquidator under this sub-section shall be to
the extent of such amount.
(5) where there are more liquidators than one, the obligation
and liabilities attached to the liquidator under this section
shall attach to all the liquidators jointly any severally.
(6) The provisions of this section shall have effect
notwithstanding anything to the contrary contained in any
other law for the time being in force.
18. Liability of directors of Private company in liquidation
Notwithstanding anything contained in the Companies Act,
1956 (1 of 1956), when any private company is wound up
after the commencement of this Act, and any tax assessed
on the company under this Act, for any period, whether
before or in the course of or after its liquidation, cannot be
recovered, then, every person who was a director of the
private company at any time during the period for which
the tax is due shall be jointly and severally liable for the
payment of such tax unless he proves that the nonrecovery cannot be attributed to any gross neglect,
misfeasance or breach of duty on his part in relation to the
affairs of the company.]