Director liability for company tax dues turns on corporate veil principles and statutory joint liability under central sales tax law.

Personal recovery of a private company's U.P. trade tax or sales tax dues from a director's assets is impermissible absent pleaded and proved grounds to lift the corporate veil; mere shareholding or control is insufficient. By contrast, Section 18 of the Central Sales Tax Act imposes joint and several liability on directors of a private company in liquidation for central sales tax dues, unless the statutory exception is established by proof that non-recovery was not due to gross neglect, misfeasance, or breach of duty. The article therefore distinguishes between corporate tax liability and the separate statutory exposure of directors under central sales tax law.

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Issues: (i) Whether the recovery certificates for U.P. trade tax/U.P. sales tax dues of the company could be enforced against the personal assets of its director. (ii) Whether the director was liable for the company's central sales tax dues under Section 18 of the Central Sales Tax Act.

Issue (i): Whether the recovery certificates for U.P. trade tax/U.P. sales tax dues of the company could be enforced against the personal assets of its director.

Analysis: The challenge to the assessment-based recovery was not supported by the necessary pleadings and documents, and the alleged application for continuation of exemption was itself disputed on facts. However, in the absence of proper pleading of fraud, the liability of a private limited company for U.P. trade tax or sales tax could not be fastened on the personal assets of its director merely because he held substantial shares or was in control of the company.

Conclusion: The recovery of U.P. trade tax/U.P. sales tax dues from the petitioner's personal assets was not permissible.

Issue (ii): Whether the director was liable for the company's central sales tax dues under Section 18 of the Central Sales Tax Act.

Analysis: Section 18 imposes joint and several liability on every person who was a director of a private company in liquidation for tax due under the Central Sales Tax Act, unless he proves that non-recovery was not attributable to his gross neglect, misfeasance, or breach of duty. The record contained no pleaded or proved facts bringing the petitioner within the statutory exception, and the written submissions could not enlarge the pleadings or introduce fresh factual defences at that stage.

Conclusion: The petitioner was liable for the company's central sales tax dues, and recovery of those dues from him was valid.

Final Conclusion: The petition succeeded only to the extent of quashing personal recovery for U.P. trade tax/U.P. sales tax dues, while the recovery of central sales tax dues against the petitioner was upheld.

Ratio Decidendi: Personal recovery of a company's U.P. trade tax or sales tax dues from its director is impermissible absent pleaded and proved grounds to lift the corporate veil, but Section 18 of the Central Sales Tax Act creates a statutory joint and several liability of directors of a private company in liquidation for central sales tax dues unless the statutory exception is established.

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