TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 484
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....ompany. However, the business activities of the Company were stopped and it is admitted that the Company is not functioning as of now. 4. To the surprise of the petitioner, his property in Survey No.144, Ernapuram Village was brought for sale by the respondent in proceedings dated 05.11.2015 for the dues of the abovesaid Company without verifying the records. The petitioner approached the respondent and has stated that he is the owner of the property and the property is not in the name of the Company. 5. In view of the fact that the Company is the defaulter of tax payments, the petitioner made a request to drop proceedings against him as well as against the property owned by him. However, the respondent informed the petitioner that the sale proceedings cannot be stopped until tax arrears are paid. Thus, the petitioner is constrained to move the present writ petition. 6. The learned counsel for the petitioner mainly contended that the Company is the different entity and therefore, the property belongs to the petitioner cannot be auctioned for the purpose of realisation of the arrears of sales tax. The Company was registered under the provisions of the Companies Act, 1956 and the ....
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....veal that the petitioner and his wife, namely, Mrs.Nirmala Rajarathinam are the only two Directors of the Company, namely, M/s.Herbalayas Radsafe India Private Limited and it was incorporated with the Registrar of Companies, Tamil Nadu on 14.10.2010 and is doing business of all kinds of devices to reduce radiation. 11. The abovesaid M/s.Herbalayas Radsafe India Private Limited filed monthly returns for the assessment year 2010-2011 and admitted the tax payable as Rs. 9,89,625/- for the said year and after adjusting the ITC of Rs. 3,90,899/- paid the entire balance amount. Subsequently, on audit verification and on cross verification of the correctness of the ITC claimed, it was found that the aforesaid M/s.Herbalayas Radsafe India Private Limited did not purchase any goods from one M/s.Proto World, Chennai having TIN No.33961423184 under the Commodity Code No.2068, during the assessment year 2010-2011 and hence, the entire claim of Input Tax Credit for 2010-2011 became incorrect and therefore, reversal of the said amount was proposed in the notice and the same was affixtured on 06.03.2014. 12. Despite the receipt of the notice, no reply was given by the said Company and hence ord....
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....to be appropriated for the dues payable by the Company, since the Company is a family entity and a Quasi Body having only the petitioner and his wife as shareholders and no returns are being filed for the past four years. 17. On 23.12.2015, the petitioner appeared before the respondent in person and agreed to settle the entire dues of Rs. 5,40,059/- in instalments and pleaded not to sell the aforesaid land by auction. Since the auction proceedings cannot be stalled by the respondent, as the same are under the control of the concerned Deputy Commissioner, the same was accordingly informed to the petitioner. Now it is learnt that on the previous day on 21.12.2015, the petitioner had filed the above writ petition, challenging the auction sale. When the above writ petition came for admission, an order of conditional stay directing to pay Rs. 2,00,000/- was passed and accordingly, the petitioner paid the same to the Office of the respondent on 23.12.2015 and in due compliance of the order of this Court, auction sale has been stayed. 18. Neither that the petitioner nor his wife, who are only the shareholders and Directors of the Company, namely, M/s.Herbalayas Radsafe India Private Lim....
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....f the Value Added Tax Act, 2006 is concerned, where a dealer is a private company and such company is wound up, every person who was a Director of such company at the time of such winding up shall, notwithstanding such winding up, be jointly and severally liable for the payment of tax, penalty or other amount payable under this Act by such company whether assessment is made prior to or after such winding up unless he proves that the non-payment of tax cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the Company. 27. Thus, two circumstances are to be considered in the present case. Firstly, if the Company belongs to the petitioner is not wound up, then admittedly, the petitioner and his wife are the only two Directors of the Company. In such circumstances, the Directors of the Company are liable to pay the tax. If the petitioner claims that the Company is already wound up, then Section 37 of the Tamil Nadu Value Added Tax Act, 2006 would come into operation and then also they are liable to pay the tax jointly and severally. Thus, in either of the case, the petitioner is liable to pay the tax and he cannot seek any ex....