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Before the Madras High court in CIT v. National Textile Corpn. Ltd. (109TAX300) there was a statutory transfer of a sick undertaking from a company to the assessee corporation.  The assessing officer of such company vide a notice issued u/s 170(3) of the Act alleged that the assessee was liable to pay the tax dues of such company who owed such transferred undertaking. After referring to the provisions of section 5 of the Sick Textile Undertakings ( Nationalisation) Act, 1974 the Court held that what was acquired under that Act was the undertaking owned by the company . The company who continues to exist is liable to pay its taxes. Further the Court held that the Act of 1974 is also a special enactment. To the extent, the provision is made therein for the revenue arrears of the Central Government, the same will prevail over the enactment which provided for the levy.


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