Corporate veil protection prevents personal recovery of company tax dues absent statute or proof of sham conduct.

A director's personal assets cannot be used to recover a company's tax dues merely because the company is in liquidation. Personal recovery requires either an express statutory provision imposing such liability or facts showing that the corporate personality is a sham, cloak, or device warranting piercing the corporate veil. On the record, there was no material of fraud, misfeasance, or any exceptional circumstance justifying disregard of separate legal personality. The recovery action against the director was therefore impermissible and the issue was decided in favour of the petitioner.

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Issues: Whether, in the absence of a specific statutory provision and without factual basis to lift the corporate veil, the tax dues of a company under liquidation could be recovered from the personal assets of its director.

Analysis: The recovery was sought from the petitioner personally only because he had been a director of the company under liquidation. The record did not disclose any material showing that the corporate personality was a cloak, mask, sham, or device used to evade tax, nor any finding of fraud, misfeasance, or similar exceptional circumstance justifying disregard of separate legal personality. The applicable principle, as recognised in tax matters, is that personal recovery from directors is not permissible merely because company dues remain unpaid; such recovery must rest on a clear statutory provision or on facts warranting lifting of the corporate veil. The cited statutory schemes showed that where the legislature intended personal liability, it expressly provided for it, and no comparable provision was shown for recovery from the petitioner in the present case.

Conclusion: Recovery of the company's tax dues from the petitioner's personal assets was impermissible. The issue is decided in favour of the petitioner.

Ratio Decidendi: A director's personal assets cannot be proceeded against for recovery of a company's tax dues unless the statute expressly so provides or the authority establishes facts justifying piercing the corporate veil.

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