TMI Blog2016 (7) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, dealer would be the company and not the directors. Section 86 of the Act pertains to the offence by companies and contains certain provisions where for the offence of the company, every person who at the time the offence was committed was in-charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence. In essence, this provision makes the person incharge of the company responsible for the offence vicariously liable for the criminal action for which the company may have been charged. In the present case, we are not concerned with any such situation. The respondents have not disputed that the properties under attachment under the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company for the purchases from these dealers is required to be disallowed. This would result to a tax demand of ₹ 73.51 lacs and with interest and penalty it would accumulate to ₹ 2.17 crores. The dealer has neither clarified these issues nor paid up the taxes. Under the circumstances, to protect the interest of Revenue, he was prompted to attach two immovable properties of the directors. 3. Learned counsel for the petitioners submitted that the assessments for the period during which said input tax credit was availed are still going on. Before finalising the assessment, the authorities could not have sought recoveries of the entire possible tax with interest and penalty. He submitted that the company had not claimed any in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directors have been attached ? 7. This issue came up for consideration before the Division Bench in the case of Choksi vs. State of Gujarat (supra ) in which it was held and observed as under: 11. In view of the above factual position, it is not necessary to examine the controversy at length. Suffice it to state that the respondents are not in a position to point out any statutory provision empowering the sales-tax authorities to fasten the liability of Company on its Directors in the matter of payment of sales-tax dues. There appears to be substance in the submission made on behalf of the petitioners that Section 26 containing the said provision regarding liability to pay tax in certain cases covers several contingencies such as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to be lifted lightly. It is only when there is strong factual foundation for lifting the corporate veil that the question of examining the applicability of the principle of lifting such veil would be required to be examined. In neither of the two petitions raising the controversy, the authorities have passed any specific order fastening the liability on the Directors personally, much less any factual foundation has been laid to invoke the doctrine of lifting the corporate veil. Hence it is not necessary to dilate on the said principle any further. 8. Sub-section (1) of section 45 of the VAT Act provides that where during pendency of any proceedings of assessment or re-assessment of turnover escaping assessment, the Commissioner is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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