Service on company directors and director liability for tax default can be valid where statute expressly permits it.

Service of recovery notices on a company's directors may be valid where the governing company law treats a director as an officer and permits service on the company through its officer; a mere misdescription of the addressee does not by itself invalidate service. The text also notes that directors are not automatically immune from proceedings for a company's tax default where the sales tax statute imposes liability for offences committed with consent, connivance, or attributable neglect. In such cases, the factual basis and extent of each director's exposure are matters for the recovery forum to examine.

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Issues: (i) whether notices issued in connection with recovery proceedings could validly be served on the company's directors and treated as service on the company; (ii) whether directors of the company could be exposed to proceedings, including criminal consequences, in respect of the company's statutory tax liability.

Issue (i): whether notices issued in connection with recovery proceedings could validly be served on the company's directors and treated as service on the company

Analysis: Section 51 of the Companies Act, 1956 permits service of a document on a company or on its officer, and the expression "officer" includes a director while "document" includes notices and other legal processes. On that footing, a notice intended for the company can be served on a director. A technical error in describing a director by designation instead of by name, or vice versa, does not by itself invalidate the notice. Questions whether some named addressees had in fact ceased to be directors were matters of fact requiring examination by the certificate authority, and did not justify interference at the threshold.

Conclusion: Service of the impugned notices on directors was held to be legally permissible, and the challenge on that ground failed.

Issue (ii): whether directors of the company could be exposed to proceedings, including criminal consequences, in respect of the company's statutory tax liability

Analysis: Section 22A of the Bengal Finance (Sales Tax) Act, 1941 creates liability for directors and other officers where an offence by a dealer is committed with their consent, connivance, or attributable neglect, and Section 22 makes specified contraventions punishable. The Tribunal distinguished authorities arising under sales tax statutes that did not contain a comparable provision. It held that directors cannot claim blanket immunity from proceedings merely because the liability arises from the company's tax default. At the same time, the extent of any liability and the factual basis for proceeding against particular directors were matters to be examined in the recovery forum after their appearance and defence.

Conclusion: The Tribunal held that directors were not immune from proceedings under the statute, and the notices threatening further steps were not shown to be unlawful.

Final Conclusion: The notices were upheld as maintainable in law, and the application was dismissed without costs.

Ratio Decidendi: Where the governing company and sales tax statutes expressly permit service on an officer and impose liability on directors for offences committed with consent, connivance, or neglect, notices addressed to directors and initiation of proceedings against them are not invalid merely because the primary liability is that of the company.

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