TMI Blog1995 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Court appointed under the provisions of the Special Court (Trial of Offences Relating, to Transactions in Securities) Act, 1992. The appellant, an Assistant Commissioner of Income-tax, sought release of the sum of Rs. 80,80,198.34, being the tax liabilities of the respondents, who are notified persons under the said Act, from the funds available with the custodian appointed under the provisions thereof. Learned counsel appearing for some of these notified persons submitted to the learned judge that he wished to show that the demands of the appellant were unreasonable and unjustified and, if satisfied, he should not order release of the amounts claimed. Having heard counsel, the learned judge passed the impugned order. It said that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Act and the inclusion of sections 9A and 9B, the Special Court is invested with civil jurisdiction in regard to such transactions. Section 11 is relevant for our purpose. Sub-section (1) states that the " Special Court may make such order as it may deem fit directing the custodian for the disposal of the property under attachment ". Sub-section (2) states that " the following liabilities shall be paid or discharged in full, as far as may be, in the order as under : " (a) all revenues, taxes, cesses and rates due from the persons notified by the custodian under sub-section (2) of section 3 to the Central Government or any State Government or any local authority ;.... " It is clear that the Special Court has no power to sit in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the funds of the company in liquidation. At that stage the winding up court can fully safeguard the interests of the company and its creditors under the Act ". The question that this court had to decide in that case was whether it was necessary for the Income-tax Officer to obtain the leave of the liquidation court when he wanted to reassess the company in liquidation for escaped income in respect of past years. This court said : " The Income-tax Act is, in our opinion, a complete code and it is particularly so with respect to the assessment and reassessment of income-tax with which alone we are concerned in the present case. The fact that after the amount of tax payable by an assessee has been determined or quantified its realisation f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the court made the observation to which Mr. Setalvad drew our attention. It is perfectly clear, in the circumstances, that this observation referred only to the obligation of the liquidation court to decide, having regard to the fact that the income-tax payable by the company in liquidation had to rank pari passu with other debts due by it, how far the amount determined could be paid while still safeguarding the interests of the other creditors of the company in liquidation. We are of the view, therefore, that this judgment does not assist us in upholding the view taken by the Special Court. The Special Court has no jurisdiction to sit in appeal over the assessment of the tax liability of a notified person by the authority or Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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