TMI Blog2022 (11) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... y and severally liable for payment of said tax. Further the provisions of Section 16B of the Act does not provide for recovery from the Director automatically in the event of failure to recover from the private limited company. On the other hand the provision specifies that if the Director 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, no recovery can be made from the said Director. Since the 2nd respondent-Company is not wound-up, no recourse can be made to recover the dues from the Director, who either continues to be on Board or ceases to be Director of the Company, inasmuch as the respondents-authorities can take steps to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huffle 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 Recovery Act, 1864 was issued to the petitioner on 08.08.2006, after the petitioner ceased to be a Director of the 2 nd respondent-Company, claiming that the 2nd respondent-Company is due for payment of arrears of tax in a sum of Rs.10,31,390/-, for which the property of the petitioner was attached under the impugned proceeding by the 1 st respondent; that the notice is purported to have been issued in exercise of powers conferred under Section 16B of the Act, and such exercise of power by the Authority in issuing notice of attachment is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 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 for similar relief to the petitioner by setting aside the impugned notice of attachment. 7. Counter affidavit on behalf of the 1st respondent is filed. By the said counter affidavit filed, the respondent does not controvert the assertion made by the petitioner in the writ affidavit that the petitioner ceased to be a Director of the 2nd respondent-Company during the year 2001-02. Further, in reply to paragraph 8 of the writ petition affidavit, the 1st respondent, merely stated as under: 9. it is submitted that the managem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 severally liable for payment of said tax. 11. Further the provisions of Section 16B of the Act does not provide for recovery from the Director automatically in the event of failure to recover from the private limited company. On the other hand the provision specifies that if the Director 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, no recovery can be made from the said Director. 12. Perusal of the impugned notice of at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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