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2014 (8) TMI 187 - KARNATAKA HIGH COURTLiability of Company - recovery from the director of Company - Attachment of property of petitioner for liability of Company - Petitioner contends that he was a Director of the Company from 1996 and as he is not the proprietor, he is not personally liable for the liability of the Company that too for the period anterior to his becoming Director of the Company - Held that:- Under Section 14 of the Karnataka Sales Tax Act, a partner of the Firm can be proceeded against the dissolved firm or the firm which is ceased to continue its business. However, in respect of a Company, the liability of its Directors would be restricted. There is no provision under the Act so as to fasten the entire liability on any one of the Directors of the company to recover the amounts due in respect of the erstwhile assessee-Company Petitioner was only a Director of the Company and as such, proceedings initiated for mutating the revenue records in the name of 1st respondent that too without issuing notice to the petitioner would be in complete violation of principles of natural justice. Such action of respondent Nos.1 and 2 cannot be sustained. The ends of justice would be met if 1st respondent is directed to consider the claim of the petitioner and thereafter take appropriate steps to recover the amount in accordance with the provisions of the Act and also by taking note of the fact that petitioner is a Director of a Company incorporated under the Companies Act and if it comes to the conclusion that petitioner was not the Director of the Company for the period in question, it would be needless to state that liability cannot be fastened on the petitioner. However, if the 1st respondent-authority were to find on facts otherwise, he would be at liberty to proceed against petitioner in accordance with law - matter remanded back - Decided in favour of assessee.
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