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2014 (3) TMI 1137 - HC - VAT and Sales TaxRecovery of the sales tax due from the Private Companies - section 26C of KGST Act - first contention raised by the learned counsel appearing for the parties was that S. 26C being prospective, tax due for any period prior to 01.04.1999, could not have been recovered by taking recourse to this provision - Held that:- Section 26C will be applicable for recovering the tax or other amount due under the K.G.S.T. Act from a Company either existing, wound up or is under liquidation and if the other ingredients of the section are also satisfied, every person who was a Director of such company at the time when the amount became due, shall be jointly and severally liable. This therefore means that under Section 26C, a Director, who was in office when the amount became due, is made liable for amount due from the company and such liability could have been incurred by the Company any time prior to 1.4.1999 also and if such liability is remaining outstanding and is not recoverable for any reason as stated in the Section, the Directors who were then in office are jointly and severally liable. The above elements of the Section would show that though this provision was introduced w.e.f. 1.4.1999, it applies for recovery of the liabilities incurred by the company prior to 1.4.1999 also. Section 26C of the K.G.S.T. Act cannot be taken advantage of by the State to recover amounts due to it for the periods prior to 1.4.1999. Appeal allowed.
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