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of <h1>Directors held liable for income tax arrears even after resignation.</h1> The court upheld the validity of orders issued by tax authorities for the recovery of tax arrears, holding the petitioner liable for arrears of income tax ... Company Director, Recovery Proceedings Issues:1. Validity of orders issued by Tax Recovery Officer, General Manager, and Assistant Commissioner of Income-tax.2. Liability of petitioner to pay arrears of income tax.3. Impact of resignation from directorship on liability.4. Effect of pending revision petition on recovery proceedings.5. Compliance with principles of natural justice in serving notices.6. Attachment of petitioner's salary and compliance with Code of Civil Procedure.Analysis:The judgment pertains to a petition filed to challenge orders issued by various authorities for recovery of tax arrears. The petitioner, a conductor with Punjab Roadways, had resigned from directorship of a company, Maini Finance (P.) Ltd. The tax dues were found against the company for the assessment year 1990-91. The authorities initiated recovery proceedings under section 179(1) of the Income-tax Act, serving notices on the petitioner directly and through his employer. The petitioner contested the orders, arguing that he should not be held liable post-resignation and citing pending revision petition by the company's ex-managing director.The court analyzed the contentions raised by the petitioner's counsel. Firstly, it addressed the issue of compliance with principles of natural justice in serving notices. The court found that notices were duly served on the petitioner, who had responded, thereby rejecting the argument of violation of natural justice. Secondly, regarding the petitioner's liability post-resignation, the court cited section 179 of the Act, holding that directors remain jointly and severally liable for tax dues during their tenure, even if recovery becomes impossible from the company.The court dismissed the argument that the pending revision petition by the company absolves the petitioner from liability. It clarified that the mere pendency of a revision petition does not stay recovery proceedings. Lastly, the court examined the attachment of the petitioner's salary, noting that the authorities had considered exempted portions as per the Code of Civil Procedure. The court concluded that the challenge to the recovery was baseless, and the petition was dismissed accordingly.
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