101. Liability of liquidator for tax of private companies under liquidation.-

101. Liability of liquidator for tax of private companies under liquidation.-

(1) A liquidator of a private company which is wound up, whether under the orders of a court or otherwise, shall, within thirty days after he has become such  liquidator,  give  notice  of  his  appointment  as  such  to  the  Deputy Commissioner of Taxes having jurisdiction to assess the company.

(2) The Deputy Commissioner of Taxes shall, after making such enquiries or, calling  for  such  information  as  he  may  consider  necessary,  notify  to  the liquidator within three months of the date of receipt of the notice under sub section (1), the amount  which, in his opinion, would be sufficient to provide for  any  tax  which  is  then,  or  is  likely  thereafter  to  become,  payable  by  the company.

(3) On being notified under sub-section (2), the liquidator shall set aside an amount equal to the amount so notified and shall not, before he sets aside such amount, part with any of the assets of the company except for the purpose of payment of tax payable by the company or for making payment to secure such creditors as are entitled under the law to priority of payment over debts due to the Government on the date of liquidation.

(4) The liquidator shall be personally liable for payment of the tax on behalf of  the  company  to  the  extent  of  the  amount  notified,  if  any,  under  subsection(2), if he-

(a) fails to give notice as required by sub-section (1); or
(b) contravenes the provisions of sub-section (3).

(5) Where there are more liquidators than one, the obligations and liabilities of a liquidator under this section shall attach to all the liquidators jointly and severally.
(6)  This  section  shall  have  effect  notwithstanding  anything  to  the  contrary contained in any other law for the time being in force.

Explanation.-In  this  section,  "liquidator"  includes  any  person  who  has  been appointed to be the receiver of the assets of the company under liquidation.

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