TaxTMI 
TaxTMI 
2010 (7) TMI 914
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....pparankundram Circle, Madurai (third respondent) to the District Collector, Ernakulam for realisation of a sum of Rs. 27,18,490 from Madurai Rubber Company Pvt. Ltd., by taking recourse to revenue recovery proceedings. In Exhibit P5 requisition, it is also stated as follows: "The defaulter is available in the following address: Thiru Jothi Paul, S/o. N.P. Paul, Nedunkandathil House, Cherra Nallur Post, Perambalur, Ernakulam District, Kerala State." On December 4, 2008, the District Collector, Ernakulam, issued exhibit P2 show-cause notice to the petitioner under section 65 of the Kerala Revenue Recovery Act directing him to show cause why he should not be committed to the civil prison. Exhibit P2 is a printed form. Four grounds for ar....
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....d that going by the requisition, the defaulter is the company. Recovery was sought to be made from the defaulter only. The petitioner is not the defaulter, but he is only a director of the defaulter-company. It is submitted that going by the decisions of this court, it is well-settled that a director of a company cannot be personally held responsible for the amount due from the company. In Punalur Paper Mills Ltd. v. District Collector, Quilon [1985] 60 STC 193 (Ker); [1985] KLT 758, it was held as follows (page 197 in 60 STC): "11 . . . It therefore follows that in the absence of a specific provision in the Sales Tax Act fastening the liability on the director or the managing director of a company for the tax due by the company, I am of ....
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....second petitioner represent the arrears of tax assessed and found due by the first petitioner-company. Exhibit P3 proceedings of the District Collector therefore is one passed without jurisdiction and hence void ab initio. It is non est." In Nishad Patel v. State of Kerala [1999] 113 STC 395 (Ker); [1998] 2 KLT 793, it was held that the directors of a company cannot be personally made liable to pay arrears of sales tax. It was held that it is settled law that he company is a legal entity distinct from its shareholders as well as its directors and as such, no proceedings can be taken against the directors of a company for recovery of any amount whatsoever due from the company. In Kuriakose v. P.K.V. Group Industries [2002] 2 KLT 342, the D....
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....at the petitioner would be entitled to make a reply to exhibit P2 notice and contest the case, it cannot be lost sight of that the petitioner appre hends his arrest and detention on his appearance before the District Collector. It was pointed out that in Punalur Paper Mills' case [1985] 60 STC 193 (Ker); [1985] KLT 758 it so happened and the managing director was sent to jail. The Government put forward an argument in Punalur Paper Mills' case [1985] 60 STC 193 (Ker); [1985] KLT 758 that even on quashing the order of detention, the detenue was not liable to be released. The petitioner apprehends that all such types of arguments would emerge and nothing would be a solace to him once he is detained in civil prison, particularly when he has un....