TMI Blog2021 (1) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... IGH COURT] as well as PARAS SHANTILAL SAVLA VERSUS STATE OF GUJARAT [ 2019 (7) TMI 350 - GUJARAT HIGH COURT] where it was held that Unlike section 179 of the Income-tax Act, 1961, there is no provision in the Sales Tax Act fastening the liability of the company to pay its sales tax dues on its directors. The respondent No.2 is directed to unblock the input tax credit available in the credit ledger account of the writ applicant at the earliest - application allowed. - R/Special Civil Application No. 14931 of 2020 - - - Dated:- 4-1-2021 - Honourable Mr. Justice J.B. Pardiwala And Honourable Mr. Justice Ilesh J. Vora For the Petitioner(s) : Mr. Tushar Hemani, LD. Sr. Counsel With Ms Vaibhavi K Parikh For the Respondent(s) : Mr. Chintan Dave, LD. Agp ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs; a) Pending the admission, hearing and final disposal of this petition, to release the amount of input Tax Credit available to the Petitioner. b) to quash and set aside the action of the Respondent No.2 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for the period during which the writ applicant was not even the Director. 2.4 The writ applicant addressed a letter dated 23rd September, 2020 to the respondent No.2 requesting to release the input tax credit blocked for the recovery of the amount of tax and interest in case of the Dolphin Metals under the GVAT Act. 2.5 As the respondent No.2 declined to release the input tax credit, the writ applicant was left with no other option but to come before this Court with the present writ application. 3. Mr. Tushar Hemani, the learned senior counsel assisted by Ms. Vaibhavi Parikh, the learned counsel appearing for the writ applicant vehemently submitted that the action of the respondent No.2 in blocking the input tax credit of the writ applicant under the CGST Act is patently bad, illegal, contrary to law and in gross violation of the fundamental rights as enshrined to the writ applicant under Articles 14 and 19(1)(g) of the Constitution. Mr. Hemani would submit that it is a settled position of law that the Directors of a Company are not to be held personally liable for the dues of the Company and the same cannot be recovered from the Directors under any of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us; Section 18 in the Central Sales Tax Act, 1956 *18. Liability of directors of private company in liquidation.-Notwithstanding anything contained 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 under this Act for any period, whether before or in the course of or after its liquidation, cannot be recovered, then, every person who was a director of the private company at any time during the period for which the tax is due 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. 9. Mr. Dave, thereafter, invited the attention of this Court to Section 49(3) of the CGST Act, 2017. Section 49 of the Act, 2017 falls in Chapter-X, and Chapter-X is with respect to the payment of tax. Section 49(3) reads thus; 3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount. (2)The Commissioner, or the officer authorised by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit. (3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. 12. Mr. Dave would submit that by virtue of Section 18 of the Act, 1956, when any private company is wound up after the commencement of the Companies Act, 1956 and any tax assessed on the Company under the Act, 1956 for any period whether before or in the course of or after its liquidation, cannot be recovered, then every person who was a Director of the private company at any time during the period for which the tax is due would be jointly and severally liable for the payment of such tax unless he proves that 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. 13. Mr. Dave would argue that by virtue of Section 49(3) of the Act, the amount available in the electronic cash ledger can be used for making any payment towards the tax, inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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