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2020 (8) TMI 180 - HC - VAT and Sales TaxRecovery of tax arrears from the Directors - Resignation from the post of Directors - respondent company wound up - HELD THAT:- Section 19(b) of the Tamil Nadu General Sales Tax Act as well as Section 18 of the Central Sales Tax Act makes, such of those Directors of the Company at the time of winding up, liable for the tax imposed. The said provisions would apply only if a Company had wound up and the Directors, who held the status during the time of winding up of the Company, could be held liable for the tax liability. In the present case, all the petitioners, who held the status of a Director of the fifth respondent Company, had resigned much prior to the assessment years, when the Sales Tax arrears were due or the winding up of the Company. As such, by no stretch of imagination, can the petitioners herein be deemed to be the Directors of the fifth respondent Company at the relevant point of time, when the tax liability arose. There is absolutely no justification in the tax recovery proceedings initiated by the first respondent as to how these petitioners are otherwise liable. A Writ of Prohibition is hereby issued, prohibiting the respondents from taking any proceedings against the petitioners herein for recovery of the sales tax arrears of M/s. Mothercare India Ltd., / fifth respondent herein - Petition allowed.
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