TMI Blog2003 (3) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... iti, Railway Road, Kasganj which is registered under the Societies Registration Act. As alleged in Paragraph-2 of the petition, the said society is carrying on the business of manufacturing and sale of agricultural implements like Buggi, Karha, Tasla, Channel Chokhat, Windows, Tractor Trolley etc. The society is also registered as a dealer with the Trade Tax Officer, Kasganj the Assessing Officer under the U. P. Trade Tax Act initiated proceedings under Section 3- B and imposed trade tax of ₹ 54,98,641.00 against the society against which an appeal is pending as stated in Paragraph 3 of the petition. The assessing officer issued a recovery certificate dated 18-8-2002 against the society, but it is alleged in Paragraph-4 that the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble or immovable, or against the body of such person or officer, but against the property of the society. The application for execution shall set forth the judgment, the fact of the party against whom it shall have been recovered having sued or having been sued as the case may be on behalf of the society only and shall require to have the judgment enforced against the property of the society 5. On the basis of the above provision the petitioner has alleged that the dues against the society cannot be recovered from the petitioner who is only an office bearer. The petitioner has relied on the decision of this Court in Shailesh Kumar vs. Deputy Collector, Sales Tax 1999 NTN (Vol. 14) 401 vide Annexure 6. 6. We have carefully consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or trading with enemy is sought to be defeated, the veil of corporation is lifted by judicial decisions and the shareholders are held to be persons who actually work for the corporation. 9. In the same decision the Supreme Court also observed that the concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or for defrauding others, the Court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned. The Supreme Court also observed quoting &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding horizon. 13. The aforesaid decisions have been followed by this Court in a Division Bench decision in Civil Misc. Writ Petition No. 37833 of 2002 Sanjay Kumar Gupta vs. District Magistrate, Fatehpur decided on 24-9-2002. 14. We may mention that the principle that a Company (or Society) is a distinct legal entity was evolved to encourage business and industry since many businessmen feared to start new businesses or ventures because if the said business/venture failed (due to competition, recession etc.) their personal assets e.g. house, car, furniture, clothing savings etc. could be attached and sold for the recovery in respect of the dues against the company or society. This principle was not made to help tax evaders as stated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arate entity of the society should be lifted in the present case. The petitioner claims to be the Secretary of the Society but he has not mentioned in the writ petition or in the applications, copies of which are Annexures 2 and 5 to the writ petition, whether there are any assets of the society against which the impugned recovery can proceed. He has also not mentioned who are the other office bearers of the society, and who really runs and controls the society. In the absence of these facts, which have been suppressed by the petitioner, we can reasonably assume that the assets of the society have been diverted or siphoned off by the petitioner for his own benefit. Tax dues have to be paid and we will not permit the use of the doctrine of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties Registration Act, in our opinion the said provision has no application in this case because the provisions for recovery of dues under the U.P. Trade Tax Act are different from those the Societies Registration Act. The U.P. Trade Tax Act is special Act so for as recovery of Trade Tax dues are concerned and hence the provisions in that Act will prevail over the general law in the Societies Registration Act. Moreover, Section 8 relates to judgments in Civil suits as it has to be read along with Section 7 of the Societies Registration Act. The impugned recovery is not in pursuance of any judgment of a civil in a suit and hence Section 8 has no application. 22. As regards the decision of the Supreme Court in Board of Trustees, Ayurvedic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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