Law:

Section:

Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default - Assessment year 1974-75 - Fourth respondent company was declared as relief industrial undertaking under Kerala Relief Undertakings (Special Provisions) Act, 1961 - Subsequently this company was acquired by Government under Super Clays and Minerals Mining Company (Private) Ltd. (Acquisition) of undertaking Act, 1983 and petitioner company became owner of aforesaid company - Whether as per provisions of section 6 of Acquisition Act, assets and liabilities of fourth respondent company had vested in petitioner company - Held, yes - Whether, therefore, by excluding section 6 of Acquisition Act, petitioner as successor-in-interest could not escape liability for income-tax arrears and interest due in respect of fourth respondent company - Held, yes FACTS The State Government declared the fourth respondent company which was running at a loss as a relief undertaking under the Kerala Relief Undertakings (Special Provisions) Act, 1961 (Act 6 of 1962). Subsequently, this company was acquired by the Government under the Super Clays and Minerals Mining Company (Private) Limited (Acquisition of Undertakings) Act, 1983. By reason of the notification issued under the Acquisition Act, the petitioner became the owner of the company with effect from 5-11-1983. From 1983 onwards, the Department had been making various efforts to collect the income-tax dues and the interest that had accrued on the income-tax arrears. When demand notice was sent to the petitioner demanding income-tax arrears for the assessment year 1974-75 together with interest, the petitioner sent a reply taking the stand that under section 7(4) of the Acquisition Act, the Government of Kerala had to pay the amount which was an unspecified liability and that the company was not liable to pay it. Then a notice was addressed by the first respondent to the Government. The Government gave a reply claiming that it was not liable to pay the amount, as it was a liability which arose before the vesting took place. It also contended that the compensation had been deposited with the Commissioner…

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