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2018 (6) TMI 1593 - MADRAS HIGH COURTRecovery of tax arrears - Enforce-ability of Bond executed during the pendency of the appeal - Held that:- It is not in dispute that the security bond was executed in Form XIX during the pendency of the appeal for the purpose of obtaining stay. A reading of Rule 31(1) of the Tamil Nadu General Sales Tax Rules, 1959, would clearly show that the validity of the security bond shall remain in force during the pendency of the appeal. If the appeal is allowed or remanded back, it shall become void or ineffective. In the event, the appeal is dismissed, the security bond shall be valid for another three months till further action is taken challenging the order passed by the appellate authority. Admittedly, the petitioner is not a Director. The first respondent cannot proceed against a legal heir of one of the deceased Directors. The company shall be proceeded through the Directors who are holding office and not against the legal heirs of the deceased Director. To be precise, the security bond executed in Form XIX has become void and ineffective by operation of Rule 31(1) of the Tamil Nadu General Sales Tax Rules, 1959 - Therefore, the bond executed during the pendency of the appeal is not enforceable after the disposal of the appeal. Petition allowed - decided in favor of petitioner.
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