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of <h1>Directors' personal assets protected from trade tax recovery without evidence of fraud or personal guarantee.</h1> The court ruled in favor of the petitioners, stating that recovery of trade tax dues from the personal assets of directors is not permissible unless there ... - Issues involved: Recovery of trade tax dues from personal assets of directors of a company.Judgment Summary:Issue 1: Resignation from directorship and recovery of trade tax duesThe petitioners were aggrieved by the attempt of the respondents to recover trade tax dues from the personal assets of the directors of a company. The petitioners claimed to have resigned from directorship, but even if they continued as directors, they argued that the liability of directors is limited. The Trade Tax Department's defense was based on a previous court judgment and the contention that the resignation was not intimated on time.Issue 2: Liability of directors for trade tax duesThe court decided not to delve into the actual resignation of the petitioners and assumed they continued as directors. Referring to the Companies Act, the court clarified that the liability of directors is limited by shares. The court highlighted that recovery of trade tax dues from personal assets of directors is not permissible based on the previous court decision cited by the Trade Tax Department.Conclusion:The court concluded that recovery of trade tax dues from the personal assets of the directors cannot be made, especially when there is no evidence of fraudulent transfer of funds or personal guarantee by the directors. The respondents were restrained from making any such recovery. The writ petition was allowed with this decision.
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