Separate legal entity principle bars recovery of company tax from shareholders' personal assets.

A limited company is a separate legal entity distinct from its shareholders, so sales tax assessed on the company cannot be recovered from the shareholders' personal assets. The shareholders bear no personal liability for the company's debts or tax obligations, and recovery is confined to the company's own assets. Proceedings against the shareholders' personal assets were therefore void and unlawful, and relief was granted restraining such recovery.

---

---

Issues: Whether sales tax assessed on a limited company could be recovered from the personal assets of its shareholders.

Analysis: A limited company incorporated under the Indian Companies Act is a legal entity separate and distinct from its shareholders. The shareholders have no personal liability for the company's debts or liabilities, and tax assessed on the company can be realised only from the company's assets.

Conclusion: Proceedings against the shareholders' personal assets were held to be void and unlawful, and relief was granted restraining recovery from them.

Ratio Decidendi: Tax assessed on a company cannot be recovered from shareholders personally, because the company and its shareholders are separate legal entities and the shareholders are not liable for the company's obligations.

---