1999 (2) TMI 681 - HC - VAT and Sales Tax

Summary

Issues:
Recovery of dues from office bearer of a Co-operative Society.

Analysis:
The petitioner, the President of a Co-operative Society, challenged demands raised by the Sales Tax Officer for the Assessment Years 1982-83 to 1986-87. The key issue was whether the demands could be recovered from the petitioner, who is only an office bearer of the Society and not personally liable for the Society's debts. The Counsel for the respondent failed to identify any provision in the Co-operative Societies Act, 1965 allowing recovery from office bearers. Section 95 of the Act specifies the recovery of sums due to the Government from a Co-operative Society or its members, officers, or past members. The recovery process involves realizing dues from the Society's property first and then from members or past members, subject to their liability limits.

The judgment emphasized that the dues of a Co-operative Society, including those of its members or officers, can only be recovered as arrears of land revenue under Section 95(1) of the Act. Recovery from individuals is outlined in Section 95(2), where dues can be collected primarily from the Society's property and then from members, past members, or deceased members' estates, limited by their liability. Individual liabilities of members or officers of a Society cannot be enforced under Section 95 of the Act. In the present case, the petitioner, as an officer of the Society, is not personally responsible for the Society's dues. The recovery process must exhaust the Society's assets before pursuing individual office bearers for payment. Therefore, the notice issued against the petitioner was quashed, allowing tax authorities to proceed against the Society for recovery in accordance with the law, without holding the petitioner liable for the Society's debts.

In conclusion, the judgment clarified that the recovery of dues from a Co-operative Society should follow the prescribed legal procedures outlined in the Co-operative Societies Act, 1965. Individual office bearers are not automatically liable for the Society's debts, and recovery efforts should primarily target the Society's assets before seeking payment from members or officers. The ruling protected the petitioner from personal liability for the Society's dues, emphasizing the importance of adhering to legal provisions in debt recovery processes.