TMI Blog1979 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... K., E. S. VENKATARAMAIAH. JUDGMENT The judgment of the court was delivered by UNTWALIA J.-- This is an appeal by certificate from the order of the High Court of Punjab and Haryana dismissing the appellants' writ application in limine. Sandak Transport Company (Private) Ltd. is a private limited company. The two appellants were its directors. One of them was a managing director. A resolution was passed on the 13th November, 1961, for a voluntary liquidation of the company at the instance of its creditors. In respect of some years ending with the assessment year 1964-65, a huge amount of income-tax to the tune of ₹ 1,34,319 remained due from the company. The ITO issued a notice on 7th of February, 1970, against appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in the Companies Act, 1956 (1 of 1956), when any private company is wound up after the commencement of this Act, and any tax assessed on the company, whether before or in the course of or after its liquidation, in respect of any income of any previous year cannot be recovered, then, every person who was a director of the private company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. The section was amended in 1975 making it more stringent against the directors of a private company, but we are not concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay the huge arrears of income-tax due from it. The directors were sought to be caught exactly for this purpose. When the company goes into liquidation it becomes difficult for the department to realise its dues from the assets of the company and more so when the company has been finally wound up and dissolved. The directors, therefore, have been made liable to pay such dues. Section 179 is meant to squarely cover such a case also and the appellants cannot escape their liability for the dues. The proceedings were rightly initiated against them for realisation of the dues. The High Court was perfectly justified in dismissing the appellants' writ petition in limine. We find no merit in this appeal and it is accordingly dismissed with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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