TMI Blog2019 (3) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... course to proceedings under Section 18 of the Central Sales Tax Act, 1956 and any valid order for effecting recovery of arrears of sales tax from the directors of a private limited company in liquidation, the proceedings relating to recovery of arrears of tax from the petitioner being a director were not permissible in law. The action of the respondents in compelling the petitioner to clear the dues of the company cannot be sustained - petition allowed - decided in favor of petitioner. - CWP No.27217 of 2015 - - - Dated:- 14-2-2019 - MR AJAY KUMAR MITTAL AND MRS. MANJARI NEHRU KAUL, JJ. For The Petitioner : Mr. Jagmohan Bansal, Advocate For The Respondents : Mr. Anshuman Chopra, Advocate ORDER Ajay Kumar Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of predeposit order passed by the Tribunal. Vide order dated 16.4.2010, Annexure P.2, the Delhi High Court remanded the matter to the Tribunal to consider plea of financial hardship. The company due to closure of its business could not comply with the orders of the Tribunal. The Tribunal vide order dated 10.6.2011, Annexure P.3 dismissed the appeal of the company for non compliance of condition of pre-deposit. The respondent-department vide order dated 2.2.2015, Annexure P.4 asked the petitioner to deposit outstanding dues of the company. In case of non deposit, appropriate action was to be initiated against the petitioner. The petitioner vide letter dated 16.2.2015, Annexure P.5, informed the respondents that a share holder could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany alleging clandestine clearance of goods without payment of Central Excise Duty. The company was having sixteen Directors including the petitioner as one of them. The respondent department called upon the company to show cause as to why duty amounting to ₹ 2.65 crores should not be recovered from them as also equal amount of penalty. The company replied to the show cause notice. The adjudicating authority turned down all the submissions and held the company liable to pay duty alongwith the penalty. The company filed appeal before the Tribunal alongwith stay application under Section 35F of the 1944 Act. The Tribunal directed the company to deposit ₹ 2.65 crores as pre-deposit. A Civil Writ Petition was filed by the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovered, then every person, who was a director of the private company at any time during the period on which tax is due, shall be jointly and severally liable for the payment of tax unless he proved that the non-recovery cannot be attributed to any gross negligence, misfeasance or breach of duty on his part in relation to the affairs of the company. In the absence of taking any specific recourse to proceedings under Section 18 of the CST Act and passing of any valid order for effecting recovery of CST from the directors of the private limited company in liquidation, the proceedings relating to recovery of arrears of CST from the petitioner is held to be not permissible in law. Further, the respondents have not shown that the amount of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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