RAJAMANNAR, C.J. - This appeal against the judgment of Krishnaswami Nayudu, J., raises an interesting question of law. It arises in the compulsory winding up of a company incorporated under the Indian Companies Act, called the Peerdan Juhurmal Bank Ltd. The order for winding up was passed on September 12, 1949. On October 5, 1948, a demand under Section 18A of the Indian Income-tax Act was made on the bank. The question is whether in the winding up the State is entitled to preferential payment of the amount of this demand under Section 230 of the Indian Companies Act. The learned Judge, Krishnaswami Nayudu, J., held that the State was entitled to the priority claimed. The joint official liquidators of the bank are the appellants.

Under Section 230(1)(a) the State is entitled to be paid in priority to all other debts, all revenue, taxes, cesses and rates due from the company at the date specified in sub-section (5) of Section 230 and having become due and payable within the twelve months next before that date. Sub-section (5) specifies the material date in the case of a company ordered to be wound up compulsorily, which had not previously commenced to be wound up voluntar