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1996 (10) TMI 464 - AT - VAT and Sales Tax
Issues:
1. Liability of the petitioner to pay tax, interest, and penalty outstanding against a company. 2. Validity of section 9D of the Act and circular regarding personal liability of directors. 3. Legality of the notice dated September 13, 1990, to prosecute the petitioner under section 16(3)(h) of the Act. Analysis: Issue 1: Liability of the petitioner The petitioner, a director of the company, contested liability for outstanding tax, interest, and penalty. The respondent argued the petitioner's liability. The Tribunal examined if section 9D applied to the company, concluding it was not applicable to public limited companies. As the company was public limited, the Tribunal held section 9D couldn't be invoked against the petitioner for recovery. Issue 2: Validity of section 9D and circular Given the finding on applicability, the Tribunal did not delve into the validity of section 9D or the circular regarding personal liability of directors. The Tribunal's decision on the first issue rendered this consideration unnecessary in this case. Issue 3: Legality of the notice The notice dated September 13, 1990, sought to prosecute the petitioner under section 16(3)(h) of the Act for non-payment despite opportunities. The Tribunal noted the legal provision holding directors liable for company offenses. The petitioner denied the necessary elements for prosecution. The Tribunal found disputed factual questions, stayed the notice's operation, and allowed the petitioner to respond and present evidence. The Tribunal deemed the notice prima facie valid and refused to quash it. In conclusion, the Tribunal partially allowed the writ petition, restraining the respondents from invoking section 9D against the petitioner. The petitioner was granted the opportunity to respond to the notice and present evidence. The Tribunal directed the respondent to decide on objections and proceed accordingly, emphasizing compliance with legal provisions. The judgment provided a detailed analysis of the issues raised, ensuring a fair consideration of the petitioner's contentions and legal implications.
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