Summary
The Supreme Court restored the Revenue’s tax appeal for decision on merits after the High Court treated it as infructuous solely because the assessee company had been struck off. The High Court had overlooked the relevant surviving-liability and discontinued-business provisions; the Supreme Court left the tax controversy undecided.
Issues
- Whether dissolution following striking off alone made the Revenue’s pending appeal infructuous.
Provisions considered
- Section 560(5), proviso (a), Companies Act, 1956The High Court had to consider the preservation of specified liabilities despite striking off, instead of treating dissolution alone as ending the appeal. (¶ 13–17)
- Chapter XV, Part L, Income-tax Act, 1961The provisions dealing with discontinuance of business or dissolution also required consideration in deciding the appeal; the Court did not determine the assessment merits. (¶ 13–18)
Held
- The company’s striking off did not justify summary dismissal of the tax appeal as infructuous without examining the relevant Companies Act and Income-tax Act provisions addressing liabilities in such circumstances. (¶ 10–16)
- The tax controversy required fresh merits consideration. The Supreme Court expressed no view on that controversy and requested disposal preferably within six months given the appeal’s age. (¶ 17–18)
Result
Revenue appeal allowed; High Court order set aside and tax appeal remanded for fresh merits disposal in accordance with the relevant statutes, preferably within six months. Merits left open.