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TMI Blog2022 (11) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of attachment as being illegal, contrary to the provisions of APGST Act, 1957(for short 'the Act') and violative of principles of natural justice. 2. Heard Sri B.Chandrasen Reddy, learned Senior Counsel appearing for the counsel for petitioner and Sri K.Raji Reddy, learned Special Standing Counsel for Commercial Taxes appearing on behalf of the 1st respondent, and perused the record. 3. Petitioner contends that she was Director of the 2nd respondent-Company during the period 1999 onwards and resigned in the year 2001-02 on account of reshuffle in the Board of Directors and thus ceased to be a Director of the 2nd respondent-Company. 4. Petitioner further contends that the impugned notice of attachment under Section 27 of the Revenue R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wound-up, for the authorities to recover the tax arrears from the Directors as provided under Section 16B of the Act. 6. In support of the above said contentions, reliance is placed on the decision of the erstwhile High Court of Andhra Pradesh in the case of Maddi Swarna v. Commercial Tax Officer and Ors. 2001 124 STC 203 AP= MANU/AP/0929/2001 and Sunil Kumar Agarwal v. The Commercial Tax Officer MANU/AP/1138/2010. Learned Senior Counsel would further rely on a decision of this Court, dt.28.10.2022, in WP.No.20345 of 2007, wherein this Court took a similar view that arrears of tax cannot be recovered from the Directors except when the company is wound-up or going through the process of liquidation. Learned Senior Counsel therefore seeks fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany at the relevant point of time is responsible to see that the taxes are paid and that in certain exceptional cases, the Court is entitled to lift the corporate veil and pay regard to the economic realities behind the legal façade. 9. We have taken note of the respective contentions urged. 10. A reading of Section 16B of the Act indicates that the liability of the Directors of a private company would arise only when the a private company is wound-up and any tax assessed on the company under the Act for any period before or in the course of or after its liquidation cannot be recovered. Thus, 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 several ..... X X X X Extracts X X X X X X X X Extracts X X X X
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