Page 122 - GSTL_21st May 2020_Vol 36_Part 3

368 GST LAW TIMES [ Vol. 36
the Income Tax refund amount credited to the 6th respondent’s Bank account
with the petitioner Bank and that the petitioner cannot claim it.
Finding :
60. Consequently we hold that the impugned notice under Section 87 of
the Finance Act, 1994 issued by the 3rd respondent cannot be sustained in law.
Whether the 5th respondent’s claim prevails over the claim of the petitioner?
61. We have already noted that the claim of the 5th respondent for
Provident Fund contributions and damages against the 6th respondent is based
on Section 11 of the Employees Provident Fund and Miscellaneous Provisions
Act, 1952. The said provision states :
“11. Priority of payment of contributions over other debts. - (1) Where
any employer is adjudicated insolvent or, being a company, an order for
winding up is made, the amount due -
(a) from the employer in relation to an establishment to which
any Scheme or the Insurance Scheme applies in respect of any
contribution payable to the Fund or, as the case may be, the
Insurance Fund, damages recoverable under Section 14B, ac-
cumulations required to be transferred under sub-section (2)
of Section 15 or any charges payable by him under any other
provision of this Act or of any provision of the Scheme or the
Insurance Scheme; or
(b) from the employer in relation to an exempted establishment in
respect of any contribution to the Provident Fund or any In-
surance Fund (in so far as it relates to exempted employees),
under the rules of the Provident Fund or any Insurance Fund
any contribution payable by him towards the Pension Fund
under sub-section (6) of Section 17, damages recoverable un-
der Section 14B or any charges payable by him to the appro-
priate Government under any provision of this Act or under
any of the conditions specified under Section 17,
shall, where the liability therefor has accrued before the order of adjudica-
tion or winding up is made, be deemed to be included among the debts
which under Section 49 of the Presidency Towns Insolvency Act, 1909, or
under Section 61 of the Provincial Insolvency Act, 1920 or under Section 530
of the Companies Act, 1956, are to be paid in priority to all other debts in
the distribution of the property of the insolvent or the assets of the compa-
ny being wound up, as the case may be.
Explanation. - In this sub-section and in Section 17, ‘insurance fund’ means
any fund established by an employer under any scheme for providing ben-
efits in the nature of life insurance to employees, whether linked to their
deposits in provident fund or not, without payment by the employees of
any separate contribution or premium in that behalf.
(2) Without prejudice to the provisions of sub-section (1), if any amount is due
from an employer , whether in respect of the employee’s contribution (deducted
from the wages of the employee) or the employer’s contribution, the amount so due
shall be deemed to be the first charge on the assets of the establishment, and shall,
notwithstanding anything contained in any other law for the time being in force, be
paid in priority to all other debts.” (emphasis supplied)
62. While sub-section (2) of Section 11 of the said enactment contains a

GST LAW TIMES  21st May 2020  122