2001 (6) TMI 795

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....d by the Deputy Commercial Tax Officer, Ganapavaram, Guntur district, the second respondent herein, in exercise of the power conferred upon him under section 8 of the A.P. Revenue Recovery Act read with section 17-C of the Andhra Pradesh General Sales Tax Act, 1957, for short, "the APGST Act". 2.. The short question that falls for our consideration and decision in this case is whether the respondent-authorities can validly proceed against the private properties of the petitioner and recover the outstanding tax due from a private limited company in which the petitioner is a director without winding up that company in accordance with law. 3.. The background facts leading to the filing of the writ petition be noted briefly as under: M/s.....

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....rity of law apart from being violative of section 16B of the APGST Act and also the provisions of the Companies Act, 1956. The learned counsel would urge that under the provisions of the Companies Act, the liability of the shareholders is limited to the shares held by them and therefore the shareholders of the company are governed by the provisions of the Companies Act, 1956. In that view of the matter, recovery of the outstanding dues from the company from out of the personal assets of the shareholders is one without authority of law and therefore the impugned notice should be declared as illegal and invalid. The learned counsel would also contend that since the company is not yet wound up, the provisions of section 16-B of the APGST Act a....

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....r for recovery of the arrears of tax except in the manner provided in section 16-B. In the instant case, the assessee-company is not in liquidation and it has not yet wound up under the provisions of the Companies Act and therefore the necessary conditions to invoke the provisions of section 16-B do not exist and consequently the impugned notice could not be treated to have been issued in exercise of the power conferred on the second respondent by section 16-B of the APGST Act. In the case of Ramnarayan Shahu v. Commercial Tax Officer (FAC) [1990] 78 STC 97 (AP); (1990) 10 APSTJ 197, it was held that the directors of a private limited company cannot be proceeded against personally in recovery of the amounts due from the company except in th....