Director's personal property cannot be attached for company tax dues without express statutory authority.

A director's personal residential property could not be attached for recovery of a private limited company's sales tax dues in the absence of an express statutory provision fastening the company's liability on the director. The Gujarat HC applied the settled principle that corporate tax dues cannot be recovered from a director's private assets unless the relevant sales tax law specifically authorises such recovery. As the attached property belonged personally to the director and no enabling provision was shown, the attachment notice was unsustainable and was quashed.

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Issues: Whether the personal residential property of a director could be attached and proceeded against for recovery of sales tax dues of a private limited company in the absence of any statutory provision fastening such liability on the director.

Analysis: The petition challenged the attachment notice issued against the first petitioner's residential property for alleged dues of the company. The legal position relied upon and applied was that, unless the relevant sales tax law expressly provides for fastening the company's tax liability on its directors, the department cannot recover the company's dues from the director's personal assets. The property attached belonged to the director individually, and the record did not disclose any provision authorising such attachment for the company's dues. In view of the settled position that corporate dues cannot be recovered from a director's private property without statutory authority, the impugned attachment could not be sustained.

Conclusion: The issue was decided in favour of the petitioners. The attachment notice against the director's residential property was held unsustainable and was quashed.

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