Director liability for company tax arrears cannot be extended by treating amalgamation as winding up; recovery attachment was unsustainable.

Recovery of a company's tax arrears from a former director is permissible only where the statute expressly authorises such action, particularly in the context of liquidation. The text distinguishes amalgamation from winding up: amalgamation transfers assets and liabilities to the transferee company, but it is not equivalent to liquidation or winding up merely because the transferor company ceases to exist in its original form. On that basis, attachment of the former director's property in revenue recovery proceedings for the company's tax dues was held unsustainable, and the impugned recovery action was set aside.

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Issues: Whether arrears of tax due from a company could be recovered from a former director by attachment of his properties under the revenue recovery provisions, and whether amalgamation of the company could be treated as equivalent to winding up so as to attract director liability.

Analysis: Recovery of a company's tax dues from its directors is permissible only within the statutory framework that authorises such recovery when the company is in liquidation. An amalgamation under the Companies Act operates by transfer of assets and liabilities to the transferee company and is legally different from winding up. The winding up procedure is governed separately under the Companies Act and cannot be equated with amalgamation merely because the transferor company ceases to exist in its original form. On that footing, the attachment issued under the revenue recovery proceedings against a former director for company arrears was not legally sustainable.

Conclusion: The challenge to the attachment succeeded, and the recovery action against the petitioner was held unsustainable.

Final Conclusion: Company tax arrears could not be recovered from the petitioner's properties on the basis adopted by the revenue authority, and the impugned attachment was set aside.

Ratio Decidendi: Director liability for recovery of company tax dues arises only when the statute so permits, and amalgamation is not the same as winding up or liquidation for the purpose of enforcing such recovery.

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