Corporate veil and director liability prevented attachment of private property for company sales tax dues.

The State could not attach or create a revenue charge over a former director's privately purchased property to recover company sales tax dues where no order had lawfully fastened personal liability on the director and no factual basis existed to lift the corporate veil. Applying Article 226 review and following the earlier view on corporate separateness, the Court held that company tax liabilities could not be enforced against the director's private assets on the material before it. The attachment orders and revenue charge were quashed, and the matter was decided in favour of the assessee.

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Issues: Whether the State could recover sales tax dues of a company by attaching and creating a charge over the private property of a former director.

Analysis: The writ petition was examined under Article 226 of the Constitution of India. The property in question was purchased by the petitioner by a registered sale deed, and the State sought recovery of company dues by treating the property as liable on the footing that it had belonged to a director of the company. The Court followed the earlier view that, in the absence of any order fastening personal liability on the director and without a factual foundation to lift the corporate veil, the authorities could not proceed against the director's private property for realization of company tax dues.

Conclusion: The attachment orders and the revenue charge over the petitioner's property were quashed and set aside, and the issue was decided in favour of the assessee.

Ratio Decidendi: In the absence of personal liability lawfully fastened on a director, the State cannot attach the director's private property to recover the sales tax dues of the company.

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