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2011 (7) TMI 1036 - ALLAHABAD HIGH COURTWhether in respect to tax dues or other public revenue or in other cases, if one has to discard the corporate personality, then the initial burden would lie upon it to place on record relevant material and facts to justify invocation of doctrine of lifting of veil and to plead that the corporate shell be not made a ground of defence? Held that:- In the present case, the company was declared as a sick company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The findings necessary, to proceed against the assets of the directors of the company for lifting of corporate veil, would have required investigation into the affairs of the company. In the aforesaid facts, the writ petition is allowed. The impugned notice dated March 28, 2004 for the assessment year 1999-2000 for recovery of trade tax dues is quashed to the extent that recovery be not forced against the assets of the directors of the company. It will be open to the Department to proceed against the assets of the company, or apply before the BIFR where the proceedings are still pending. It will also be open to the Department to carry out investigation to find out if the directors of company have played any fraud, and the circumstances necessary for lifting of corporate veil are available, before proceeding to recover the trade tax dues for them.
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