2018 (3) TMI 975

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y No.274/1, Pukkathurai Village, Madurantagam Taluk, and an extent of 0.05 acres, in Survey No.3/1A1 in Kolampakkam Village, Madurantakam Taluk, by a registered sale deed, dated 22.09.2008, registered as Doc.No.5015 of 2008 on the file of the Sub-Registrar Office, Madurantakam, has approached this Court, challenging a communication sent by the first respondent, dated 13.04.2009, addressed to M/s.Batharachalam Rubber Factory Private Limited and its Directors M.Krishnamurthy, M.Gopalakrishnamurthy and the Revenue Officials. This notice proposes to bring the property of M/s.Batharachalam Rubber Factory Private Limited for sale, for recovery of the sales tax arrears of Rs. 59,66,588/-. 3. Admittedly, the impugned communication has not been a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....our of the petitioner. 5. Thus, by virtue of the impugned notice, the first respondent seeks to proceed against the immovable property owned by the defaulting Company for recovery of the sales tax dues. The property, having been sold by the Official Liquidator pursuant to the order passed in Winding Up proceedings and the sale, having been held pursuant to the orders by this Court, proper remedy available for the respondent/Department is to approach the Official Liquidator, by way of a Claim Petition, and the respondent/Department is not justified in proceedings against the petitioner, who is a bona fide purchaser, for valuable consideration. This type of transactions have been protected by various decisions of this Court, and one such b....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or other directors of a limited liability company cannot be proceeded against as regards recovery of arrears of sales tax payable by the company. In the case of Lalita Shivaram Ubhaykar v. CTO, XII Circle, Bangalore, (1975) 35 STC 267, in which the company committed default in payments of sales tax due from it and the authorities proceeded against the petitioner who was its director, for recovery of the sales tax dues, the High Court of Karnataka has held that there is no provision in the statute which authorises recovery of arrears due from a company by proceedings against its director. In the case of Ramachandran v. State of Kerala, ((1984) 55 STC 209), the High Court of Kerala held that there is no provision of law whic....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f the amount of tax, interest and penalty outstanding against the company." 6. For the reasons stated in the foregoing paragraphs and in the light of the decisions referred to above and in the absence of any statutory provision, I am of the view that the impugned order is liable to be set aside and it is accordingly set aside. The writ petitions are allowed. No costs." " 6. In the light of the above cited decision, it may not be necessary for this Court to set aside the impugned proceedings, but, it would suffice to hold that the impugned proceedings cannot be enforced against the petitioner or the property purchased by them, leaving it open to the Commissioner of Sales Tax Department to proceed against the defaulting Company, w....