Private property protection against company tax recovery fails only if the State proves company ownership or benami holding.

The personal property of a managing director of a private limited company cannot be attached or sold to recover the company's sales tax dues unless the State shows a lawful basis linking that property to the company or proves that it is held benami for the company. Where the State asserted neither company ownership nor benami holding, the proposed auction of the managing director's residential property lacked jurisdiction and could not be sustained against the company's tax liability. The writ challenge therefore succeeded on the absence of any legal foundation for proceeding against private property.

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Issues: Whether the personal property of the managing director of a private limited company can be attached and sold for recovery of sales tax dues payable by the company.

Analysis: The writ petition under Article 226 challenged the proposed auction of the managing director's residential property for recovery of dues of the company under the sales tax laws. The State did not assert that the property ever belonged to the company or that the managing director held it as a benamidar. In the absence of any such basis, the attachment and proposed sale of the managing director's private property could not be sustained for recovery of the company's tax liability.

Conclusion: The attachment and proposed auction of the managing director's personal property were without jurisdiction, and the challenge succeeded.

Final Conclusion: Private property of a company's managing director cannot be proceeded against for recovery of the company's sales tax dues unless a lawful basis is shown linking that property to the company or to a benami holding.

Ratio Decidendi: For recovery of a company's tax dues, the State cannot attach or sell the personal property of the managing director in the absence of proof that the property belongs to the company or is held benami for it.

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