Case Law Details
Kasturi Chowdhury
The manner of distribution of the assets of a company during liquidation is fraught with ambiguity and settlement of such claims arising out of it has inconvenienced the parties concerned since the advent of the Insolvency and Bankruptcy Code, 2016 (“Code”). In a recent ruling, the judgement of the Hon’ble High Court of Hyderabad showed the path to be followed when there arose such conflict regarding priority of settling the dues of the Income Tax authority during liquidation of a Company.
This article essentially deals with the provisions of the Code in juxtaposition to the Income Tax Act, 1961 deliberating upon the judgement of the Hon’ble High Court in the matter of Leo Edibles & Fats Ltd. Vs. The Tax Recovery Officer (Central) IT Dept.
FACTS OF THE CASE:
Leo Edibles & Fats Limited, the petitioner in the present case, filed a writ petition with the Hyderabad High Court, against the action of the Sub-Registrar, Erragadda, Hyderabad, in refusing to register its purchase of immovable property, in the liquidation proceedings of VNR Infrastructures Limited (“VNR”), since the Income Tax Department claimed charge over such immovable property, pursuant to an earlier notice of attachment for non-payment of tax by the corporate debtor, VNR.
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