2017 (11) TMI 1029

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.... consideration is whether respondents 1 and 2 can proceed against the personal property of the petitioner for recovery of the sales tax arrears payable by the 3rd respondent/company. The respondent has invoked Section 19 (B) of the Tamil Nadu General Sales Tax Act. The said provision would have no application to the facts of the case, because, there is no record to show that the company has wound up by following the procedure under the Companies Act, 1956. 3.In the parawise instructions given by the first respondent to the learned Special Government Pleader, vide letter dated 17.12.2008, it has been stated that the company has stopped business or wound up during December 1999. 4.However, there is no record to show that an order of win....

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....e of by the respondent for sustaining the order, which provides for the liability to tax of a partitioned Hindu family or dissolved firm. Even Section 19B of the Act, which provides for liability to tax of a private company on winding up, cannot be invoked. In this regard, useful reference can be had to the decisions of various High Court, which are as follows: In the case of Desiraju Venkatakrishna Sarma, In re [1955] 25 Comp Cas 32, the Andhra Pradesh High Court has, in similar circumstance, held that a company is a body corporate and can be made liable for payment of taxes in respect of taxes payable by it. There is no personal obligation on the shareholders or the directors of a limited company in respect of the debts,....

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....ings can be initiated against the director or the managing director for recovery of such dues. In Nishad Patel v. State of Kerala [1999] 113 STC 395, the High Court of Kerala held that a 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 amounts whatsoever due from the company. The directors cannot be made personally liable to pay arrears of sales tax due from the company under the Kerala General Sales Tax Act, 1963. In Subhash Chandra Kankaria v. State of Rajasthan [1999] 114 STC 413, the Jodhpur Bench of the Rajasthan Taxation Tribunal held the provisions of section 9D of the Rajasthan Sales Tax ....