Facts of the Case

In ongoing liquidation proceedings under R.C.C. No. 2 of 1995 (concerning M/s. A.P. Carbides Ltd. and 40 other companies wound up by the Court), the Official Liquidator filed this application seeking court approval to allocate the half-yearly audit of 41 companies in liquidation (for the period 01.04.2022 to 30.09.2022) among three Chartered Accountant firms, along with permission to file audit reports and pay audit fees. This is a routine Companies Act liquidation-administration matter with no GST law content — GST is mentioned only as part of the audit fee structure.

Issues Involved

  1. Whether the Official Liquidator's proposed allocation of 41 companies among three Chartered Accountant firms for statutory half-yearly audit should be approved.

Petitioner's Arguments

  • In accordance with Section 462 of the Companies Act, 1956 and Rules 298 and 302 of the Companies (Court) Rules, 1959, the Official Liquidator is required to file accounts twice yearly, audited by Court-appointed Chartered Accountants, and sought approval to allocate 41 companies among three named CA firms.

Respondent's Arguments

  • Not applicable — this was an unopposed administrative application by the Official Liquidator.

Court Order / Findings

  • The Court allowed the application, permitting the Official Liquidator to appoint the three named Chartered Accountant firms to audit the accounts of the 41 listed companies (split proportionately among the three), for the period 01.04.2022 to 30.09.2022.
  • Audit fees were fixed at Rs. 500/- plus GST per company.
  • No order as to costs was passed.

Important Clarification

This is a purely administrative order in company liquidation proceedings and establishes no GST principle — the GST reference is limited to noting that the fixed audit fee of Rs. 500 per company would attract GST in addition, consistent with normal invoicing practice for professional services.

Sections Involved

  • Companies Act, 1956, Section 462
  • Companies (Court) Rules, 1959, Rules 298, 300 and 302

Decision – In Favour of

The application was allowed in favour of the Official Liquidator — the proposed auditor allocation and fee structure (inclusive of GST) were approved.

Case Details

  • Court: High Court for the State of Telangana, Hyderabad
  • Case Number: Company Application No. 7 of 2023 in R.C.C. No. 2 of 1995
  • Coram: Justice B.S. Bhanumathi
  • Date of Order: 27.07.2023

Link to Download the Order

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