Director liability for unrecoverable private company GST arises unless non-recovery stems from lack of gross neglect or misfeasance. If tax, interest or penalty due from a private company cannot be recovered, every person who was a director during that period is jointly and severally liable for payment unless he proves non-recovery cannot be attributed to his gross neglect, misfeasance or breach of duty. On conversion to a public company, that primary liability does not apply to amounts relating to the private period if not recovered before conversion, though personal penalties on directors remain unaffected.
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 unrecoverable private company GST arises unless non-recovery stems from lack of gross neglect or misfeasance.
If tax, interest or penalty due from a private company cannot be recovered, every person who was a director during that period is jointly and severally liable for payment unless he proves non-recovery cannot be attributed to his gross neglect, misfeasance or breach of duty. On conversion to a public company, that primary liability does not apply to amounts relating to the private period if not recovered before conversion, though personal penalties on directors remain unaffected.
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