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2012 (3) TMI 392 - HC - VAT and Sales TaxConstitutional validity of sub-section (4A) of section 47 of the Gujarat Sales Tax Act, 1969 challenged on the ground as violative of articles 14, 19(1)(g) and 300A of the Constitution of India Whether liability of the company to pay sales tax on sale of goods effected by the company cannot be fastened on the directors personally or on the personal properties of the directors? Held that:- The dues of the Government of a State being the dues of the entire people of the State, there is a valid basis for differentiation between dues of the Government of a State and dues of an individual. Whereas the State Government utilises its funds for public welfare, an individual ordinarily uses money for his private purposes. Hence, the Legislature was justified in treating the State Government as a separate class and providing for a higher rate of interest on the dues of the Government of the State. Thus the prayers challenging the constitutional validity of the provisions of sub-section (4A) of section 47 of the Gujarat Sales Tax Act, 1969 are hereby rejected. The respondents are not in a position to point out any statutory provision empowering the sales tax authorities to fasten the liability of company on its directors in the matter of payment of sales tax dues. There appears to be substance in the submission made on behalf of the petitioners that section 26 containing the said provision regarding liability to pay tax in certain cases covers several contingencies such as the liability in respect of the business carried on by an individual dealer after his death, the liability in respect of the dues where the dealer was an HUF and there is partition amongst various members or group of members; there is dissolution of a partnership firm and also in case of transfer of business in whole or in part. Unlike section 179 of the Income-tax Act, 1961, there is no provision in the Sales Tax Act fastening the liability of the company to pay its sales tax dues on its directors.
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