1964 (7) TMI 20

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....stion which this petition raises is whether the managing director of a limited company registered under the Indian Companies Act can be arrested for the realisation of arrears of sales tax due by the limited company. The limited company in the present case is the New Age Publication Limited, Patiala, and Shri Surinder Nath Khosla, Advocate, its managing director. In the return, the grounds on which the impugned action has been sought to be justified is that the petitioner had himself been actually carrying on the business in his personal capacity under the guise of Messrs New Age Publication Limited, Patiala. A further plea sought to be raised is that the petitioner was himself a dealer liable to pay the tax because he had himself been c....

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.... separate and distinct from its shareholders. The shareholders have no interest in the assets of the company and are not personally liable for its debts or liabilities. Where sales tax has been assessed on the company, proceedings for its recovery can only be taken against the assets of the company and any proceedings taken against the shareholders or their personal assets are void and against law. Reference to section 6 of the Punjab General Sales Tax Act (No. 2 of 1963) made by the respondents' learned counsel appears to me to be wholly irrelevant because it merely provides for cases where a dealer is an undivided Hindu family, firm or other association of persons which has been partitioned, dissolved or disrupted. Obviously, it can ha....