Director liability for unrecovered GST dues from a private company, subject to a due-diligence defence and conversion carve-out. Director liability applies where tax, interest or penalty due from a private company cannot be recovered for a relevant period, making every director during that period jointly and severally liable unless he proves the non-recovery was not due to his gross neglect, misfeasance or breach of duty. The rule operates notwithstanding the Companies Act, 2013. On conversion of a private company into a public company, this liability does not apply for unrecovered dues relating to the private period, except for any personal penalty imposed on the director.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Director liability for unrecovered GST dues from a private company, subject to a due-diligence defence and conversion carve-out.
Director liability applies where tax, interest or penalty due from a private company cannot be recovered for a relevant period, making every director during that period jointly and severally liable unless he proves the non-recovery was not due to his gross neglect, misfeasance or breach of duty. The rule operates notwithstanding the Companies Act, 2013. On conversion of a private company into a public company, this liability does not apply for unrecovered dues relating to the private period, except for any personal penalty imposed on the director.
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