Director liability under tax recovery provisions requires prior notice, hearing and reasoned satisfaction before attachment can proceed.

Section 44(6) of the Maharashtra Value Added Tax Act requires the authority to record satisfaction and give directors an opportunity to show that any tax non-recovery from the company was not due to gross neglect, misfeasance or breach of duty before coercive action is taken. The respondents undertook to issue a show cause notice, grant a personal hearing and pass a reasoned order, and the impugned attachment orders were withdrawn. As a result, the notices and attachments were treated as premature and enforceable only through the prescribed hearing-based process, with jurisdictional and merits contentions left open.

---

---

Issues: Whether the impugned attachment orders and notices issued against the petitioners as directors under Section 44(6) of the Maharashtra Value Added Tax Act, 2002 could be sustained without prior notice and opportunity of hearing.

Analysis: The amendment introducing Section 44(6) had come into force, but the provision required the authority to record satisfaction and afford the concerned directors an opportunity to show that non-recovery of tax from the company was not attributable to gross neglect, misfeasance or breach of duty on their part. The respondents stated that a show cause notice would be issued, followed by a personal hearing and a reasoned order. The Court accepted that stand, noted that the impugned attachment orders were withdrawn, and kept all contentions on jurisdiction and merits open.

Conclusion: The impugned orders and notices were premature and could not be enforced; the petitioners were entitled to relief at this stage.

Final Conclusion: The writ petition was disposed of after the respondents withdrew the impugned attachment orders and undertook to proceed only through a show cause process with hearing.

---