TMI Blog2021 (11) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... entatives under Section 26 of the Tamil Nadu Value Added Tax Act, 2006 is liable for assessment. This being the Scheme of the Act, no person shall be allowed to escape from the clutches of Taxation Law, merely by stating that he is not personally liable to clear the tax as the Company is failed to pay the tax - Though the Company is the legal entity, the Directors of the Company are the actual functionaries in the Company and therefore, the Directors and the Legal Representatives are liable to pay tax and in the event of failure to pay the same, the Taxation Department is entitled to recover the same by following the procedures as contemplated. This being the principles to be followed, the petitioner has not established any acceptable legal ground for the purpose of interfering with the auction notice order impugned - petition dismissed. - WP No.40767 of 2015 And MP Nos.1 and 2 of 2015 - - - Dated:- 2-9-2021 - Honourable Mr. Justice S.M.Subramaniam For the Petitioner : Mr.B.Manoharan For the Respondent : Mr.V.Veluchamy, Government Advocate ORDER The auction notice, dated 05.11.2015, issued by the respondent, is under challenge in the present writ petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner relied on the judgment of this Court in the case of George J. Mathew vs. The Commercial Tax Officer [2002 112 Company Cases 641 Mad] , wherein this Court relied on the judgment of the Andhra Pradesh High Court, in the case of Ramnarayan Shahu vs. Commercial Tax Officer, (FAC) [1990 (78) STC 97 (AP)] , held that the Directors of a Private Limited Company cannot be proceeded against personally in recovery of the amounts due from the Company except in the manner provided under Section 16-B of the APGST Act and the impugned notice issued to one of the Directors was quashed by the Andhra Pradesh High Court. 8. In an another judgment in the case of Jagteshwar Prasad Bansal and Others vs. State of Uttarakhand and Another [Judgment pronounced on 07.12.2017 in WP No.73 of 2012] , wherein in paragraphs 8 and 9, the Uttarakhand High Court at Nainital made the following observations based on Section 2(11)(e) of the Uttarakhand VAT Act, 2005:- 8. Section 2(11)(e) of the Uttarakhand VAT Act, 2005 (hereinafter referred to as the Act) reads as under: - (e) an individual, a firm or a company or other body corporate, club, Hindu Undivided Family or any other system of joint fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent. Despite the receipt of the above notices on 01.11.2014, the dealer never responded to the same. 13. The revision order dated 27.10.2014, passed by the respondent, has not been challenged and the same is still in force. Even after the lapse of one year from the aforesaid notices, the said Company has not settled the dues and therefore, recovery proceedings were initiated by the respondent. 14. The aforesaid Company, namely, M/s.Herbalayas Radsafe India Private Limited is a family entity having the petitioner and his wife as only shareholders. They are the only Directors of the abovesaid Company. The petitioner tactfully named the Company as a Limited Company, so as to evade the payment of statutory dues. The Company is a Quasi Private Limited Company and in fact, it is a family entity. After filing monthly returns for the assessment year 2010-2011, the said Company has not filed the returns nor reported any closure of business to the respondent. 15. On audit verification of the accounts of the dealer and cross verification of the selling dealer, it is found that M/s.Herbalayas Radsafe India Private Limited was in due of huge amount to the Commercial Taxes Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale with sole intention of recovering the statutory dues payable to the respondent. Though the said land stands in the name of the petitioner in his personal capacity, the petitioner and his wife tactfully evading the payment of statutory dues and hence the auction sale should be permitted, so as to recover the arrears. 20. Considering the contentions raised by the parties to the writ petition on hand, this Court is of an opinion that the petitioner himself admitted that the Company was registered and he had signed all necessary documents, applications and forms. 21. The respondent also categorically stated that the petitioner and his wife are only two Directors of the Company, namely, M/s. Herbalayas Radsafe India Private Limited. Further, the monthly returns were filed by the petitioner for the year 2010-2011 and admitted the tax payable. This being the factum established, the liability of the petitioner is to be considered with reference to the provisions of the Act. 22. Section 35 of the Value Added Tax Act, 2006, contemplates the liability of firms. Sub-section (1) enumerates where any firm is liable to pay any tax or other amount under this Act, the firm and each of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, the one case is relatable to Andhra Pradesh Value Added Tax Act and another case is relatable to Uttarakhand Value Added Tax Act and thus the provisions and the facts and circumstances discussed in those judgments are distinguishable with reference to the facts established in the present case. Thus, the said judgments are of no avail to the petitioner for the purpose of granting the relief. 30. As far as the Tamil Nadu Value Added Tax Act, 2006 is concerned, as narrated above, provisions are available for the purpose of recovery of tax from the Directors of the Company after wound up and even in cases, where the Company is not functioning, then the Directors of the said Company are liable to pay the tax and in the event of non-payment, the property belongs to the Directors of the Company shall be attached for the purpose of realisation of tax dues. 31. Even the legal representatives under Section 26 of the Tamil Nadu Value Added Tax Act, 2006 is liable for assessment. This being the Scheme of the Act, no person shall be allowed to escape from the clutches of Taxation Law, merely by stating that he is not personally liable to clear the tax as the Company is failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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