The Hon’ble SC holds that in tune with Section 134(7) of the Companies Act, 2013, notes of account do form part of the Balance Sheet and the latter is incomprehensible without the former.
While the HC had set aside the disqualification of a bidder for non-filing of notes of accounts with the Balance Sheets, on the ground that there was no specific clause in the tender document mandating the same. The Hon’ble Supreme Court on appeal set aside the order of the HC to hold that it is a statutory mandate to file notes of accounts as per section 134(7) of the Companies Act,2013.
The Court relied on its own decision in State Bank of India v. Krishidhan Seeds Private Limited: [2023] 1 SCC 209 wherein it was held that the filing of a Balance Sheet in accordance with the provisions of the Companies Act is mandatory, any transgression of the same being punishable by law.
The Court clarified that Balance Sheets can only be understood by going into the factual narrations made in the explanatory notes of accounts. It further stated that when one speaks about Balance Sheet, it takes along with it the explanatory note.
State of Bihar v. Ziqitza Health Care Ltd.
[2024] 161 taxmann.com 723 (SC)
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