Separate corporate personality limits tax recovery: directors were not personally liable for company VAT dues absent statutory basis.

A company remained the separate legal person liable for its VAT dues, and recovery could not be directed against directors' personal assets merely because notices were issued to them. The Uttarakhand VAT Act, 2005 fastened liability on the company, while director liability under the provision relied on by the revenue arose only in liquidation. In the absence of liquidation, fraud, misrepresentation, or any statutory basis to lift the corporate veil, mechanical notices treating directors as automatically liable were unsupported and personal recovery was impermissible.

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Issues: Whether the tax dues of a company could be recovered from the personal assets of its directors in the absence of liquidation, fraud, misrepresentation, or any statutory provision making directors personally liable.

Analysis: The company was a separate legal entity and the assessment and recovery proceedings were in the name of the company. The statutory scheme of the Uttarakhand VAT Act, 2005 made the company liable, while liability of directors under the provision relied upon by the revenue arose only in the context of liquidation. No material was placed to show fraud, misrepresentation, or any basis to lift the corporate veil. The notices were issued mechanically on the assumption that directors were automatically liable for company dues, which was not supported by the governing law.

Conclusion: The directors were not personally liable for the company's tax dues, and recovery from their personal assets was impermissible.

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