JUDGMENT

1. This judgment shall dispose of the questions of law common to Civil Original Case No. 19 of 1952 and civil Original Case No. 11 of 1953 which have been instituted by the official liquidator in connection with the claim of income-tax against the Pindi-Kashmir Transport Company Limited in liquidation and also to Civil Original Case No. 17 of 1952 similarly instituted in respect of the Ravi Paint Colour and Varnish Works Limited in liquidation. These cases in the first instance were heard by the learned liquidation Judge, who considered them fit for reference to a large Bench in view of the apparent conflict of authority on the law points involved therein, and my Lord the Chief Justice constituted this Bench to dispose them.

The facts giving rise to these cases may briefly be stated as follows. The Pindi-Kashmir Transport Company Ltd. was wound up on the 31st of January, 1949, by the order of the liquidation court. The creditors claims were adjusted by the order of the Court dated the 15th of January, 1951.

The return for the assessment year 1947-48 not having been submitted, a notice was issued by the Income-tax Officer, G Ward, Lahore, calling upon the official liquidator to produce the accounts for the assessment year 1947-48. As the accounts were not produced, the assessment was made under section 23 (4) of the Income-tax Act on 14th of March, 1952. The demand notice in respect of the income-tax amounting to Rs. 26,687-8-0 was served on the official liquidator on the same day.

The official liquidator instead of challenging the assessment before the proper authorities under the Income-tax Act, instituted a petition (Civil Original No. 19 of 1952) against the Income-tax Commissioner on the 22nd of April, 1952, on the allegation that the assessment was based on wholly incorrect data, with the prayer that the Income-tax Commissioner be called upon to prove the claim (i.e., the assessment) before the liquidation Court.

Civil Original No. 11 of 1953 also relates to the same company but is in respect of the assessment year 1948-49 (the accounting year being 1947-48). Here too the Income-tax Officer made the assessment under section 23 (4). On the 14th of March, 1953, the tax was assessed at Rs. 10,938 and a notice of demand was served on the official liquidator calling upon him to deposit the amount in the State Bank of Pakistan. In respect of this demand also the official liquidator instead of pursuing his remedy before the proper Income-tax authority, made a petition to the liquidation Judge on the 14th of April, 1953, on the same lines as in Civil Original No. 19 of 1952.

The facts relating to Civil Original No. 17 of 1952 are that the Ravi paint Colour and Varnish Works Limited was ordered to be wound up by the order dated 9th of January, 1948, of the learned liquidation Judge. An official liquidator was appointed. Debts and claims were adjudicated upon in accordance with law, and the first and so far final dividend was declared at the rate of 9 as. per rupee on 9th of June, 1951. On 29th of February, 1952, the Income-tax Officer, Companies Ward III, Lahore served the official liquidator with a notice of demand for payment of income-tax amounting to Rs. 15,765-7-0 for the years ending on the 30th of June, 1945, and 30th of June, 1946. This assessment was under section 23 (4) of the Income-tax Act as no returns relating to the accounts for the respective years had been supplied to the accounts for the respective years had been supplied to the Income-tax authorities.

The official liquidator prepared account statements with the sanction of the learned liquidation Judge and came to the conclusion that the company had suffered losses during the said two years and was not liable to pay income-tax.

The official liquidator in this case too instead of pursuing the usual remedies before the Income-tax authorities applied to the liquidation Judge that the Income-tax Commissioner be called upon to prove the assessments.

These petitions w