(Per L. Narasimha Reddy, J.)

In the event of a Company being woundup, in any of the three recognized modes, viz., by the Court, or voluntarily by a Company itself, or subject to the supervision of the Court, preparation of list of assets and liabilities becomes essential. The Companies Act, 1956 (for short 'the Act') recognizes certain priorities, in the matter of distribution of assets of a company, under winding-up. It is not uncommon that the assets of certain companies are burdened with liability of payment of tax of different kinds, excise duty, customs duty etc.

2. The question, as to whether the claim of a secured creditor has precedence over the right of the concerned government department, to recover dues of tax, the customs duty in particular, arises for consideration in this appeal.

3. M/s. Sri Vishnupriya Industries Limited, the 151 respondent herein, was incorporated under the Act, with an objective of undertaking manufacturing activity. It established a factory at Panyam in Kurnool District. To carryon its activity, it intended to import machinery and components, from foreign countries. Accordingly, it submitted an application to the Customs Department, to provid