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A. Venkatachalam Chettiar Versus The Assistant Commissioner Commercial Taxes, The Commercial Tax Officer, M/s. Butterfly Stainless Castables Pvt Ltd

2017 (11) TMI 1029 - MADRAS HIGH COURT

Recovery of sales tax arrears - auction of personal property of petitioner to recover dues of Company - whether respondents 1 and 2 can proceed against the personal property of the petitioner for recovery of the sales tax arrears payable by the 3rd respondent/company? - Held that: - even as per the statement made by the first respondent, the company owns properties. Therefore, the impugned notice proposing an auction of the petitioner's personal property is wholly without jurisdiction - reliance .....

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or the Petitioner : Mr.C.V.Vijayakumar for M/s.T.R.Rajaraman For the Respondents : Mr.S.Kanmani Annamalai ORDER Heard Mr.C.V.Vijayakumar, learned counsel for the petitioner and Mr.S.Kanmani Annamalai, learned Additional Government Pleader appearing on behalf of respondents 1 and 2. 2.The short issue which falls for consideration is whether respondents 1 and 2 can proceed against the personal property of the petitioner for recovery of the sales tax arrears payable by the 3rd respondent/company. T .....

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. 4.However, there is no record to show that an order of winding up was passed qua the company. Therefore, the company is still a Registered Entity on the file of the Registrar of Companies. 5.The first respondent would admit that they had obtained the address of the petitioner by approaching the Registrar of Companies, Coimbatore. This is sufficient indication to show that the company is still on the roll of the Registrar of Companies, Chennai. 6.Further, in the parawise comments, the responden .....

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2000) P.R.Sridharan (W.P.No.3086 of 2000) reported in [2007] 6 VST 399 (Mad). The operative portion of the order reads as follows:- On hearing counsel on either side, I am afraid, the argument advanced on behalf of the respondent by the learned Government Advocate can be accepted. It is well-settled that a company is a legal entity by itself and it can sue or can be sued as a legal entity and any dues from the company have to be recovered only from the company and not from its directors. Section .....

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igh Court has, in similar circumstance, held that a company is a body corporate and can be made liable for payment of taxes in respect of taxes payable by it. There is no personal obligation on the shareholders or the directors of a limited company in respect of the debts, or the taxes, revenue, etc., due from the company. The managing director or other directors of a limited liability company cannot be proceeded against as regards recovery of arrears of sales tax payable by the company. In the .....

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e of Kerala [1984] 55 STC 209, the High Court of Kerala held that there is no provision of law which enables the Revenue to proceed against a director of a company, personally for the arrears of sales tax dues from the company, which is a distinct and different legal entity, but if it is shown or substantiated that the director has got the properties of the company, the Revenue would not be prevented from proceeding against him. In the case of Punalur Paper Mills Ltd., v. District Collector, Qui .....

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its directors, and as such no proceedings can be taken against the directors of a company for recovery of any amounts whatsoever due from the company. The directors cannot be made personally liable to pay arrears of sales tax due from the company under the Kerala General Sales Tax Act, 1963. In Subhash Chandra Kankaria v. State of Rajasthan [1999] 114 STC 413, the Jodhpur Bench of the Rajasthan Taxation Tribunal held the provisions of section 9D of the Rajasthan Sales Tax Act, 1954, cannot be i .....

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