9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 350 - HC - VAT and Sales TaxAttachment of personal property of Director - Default/dues on the part of Company - whether personal property belonging to the Director of a company can be attached and sold for the realisation of the dues from the company under the Gujarat Value Added Tax Act, 2003? HELD THAT - The issue is no longer res-integra in view of the decision in the case of CHOKSI VERSUS STATE OF GUJARAT 2012 (3) TMI 392 - GUJARAT HIGH COURT where it was held that Unlike section 179 of the Income-tax Act, 1961, there is no provision in the Sales Tax Act fastening the liability of the company to pay its sales tax dues on its directors. The respondent authorities are directed to forthwith comply with the order passed by the first Appellate authority, Annexure 'D' to this petition and delete the attached entry on revenue records located in Survey No.968 (old survey No. 1310/1) Manij, Ta. Mahemadabad, District Kheda - petition allowed.
Issues Involved:
1. Whether personal property belonging to the Director of a company can be attached and sold for the realization of the dues from the company under the Gujarat Value Added Tax Act, 2003. 2. Compliance with the order of the first appellate authority to withdraw/delete the attachment entered in revenue records. Issue-wise Detailed Analysis: 1. Attachment of Personal Property for Company Dues: The primary issue addressed in the judgment is whether the personal property of a director can be attached to satisfy the dues of the company under the Gujarat Value Added Tax Act, 2003. The court referenced the case of CHOKSI V. STATE OF GUJARAT, where it was established that the liability of a company cannot be transferred to its directors' personal assets. The court quoted the relevant observations from the earlier judgment, emphasizing that the company and its directors are separate legal entities. The court noted that there is no statutory provision empowering the sales-tax authorities to fasten the liability of the company on its directors for the payment of sales-tax dues. The court also discussed the principle of lifting the corporate veil, stating it is not to be done lightly and requires a strong factual foundation, which was not present in this case. 2. Compliance with the First Appellate Authority's Order: The second issue concerns the non-compliance by the respondent authorities with the order of the first appellate authority, which had quashed the attachment of the petitioner's property. Despite the appellate authority's order dated 13.06.2006, the respondent authorities had not withdrawn or deleted the attachment from the revenue records. The court noted that the first appellate authority is a quasi-judicial body, and its orders are binding unless appealed. The court declared the non-deletion of the attachment as arbitrary, mechanical, and illegal. The court directed the respondent authorities to forthwith comply with the first appellate authority's order and delete the attached entry on the revenue records. Conclusion: The court allowed the petition, directing the respondent authorities to comply with the first appellate authority's order and delete the attachment entry from the revenue records. The judgment reaffirmed that the personal property of a director cannot be attached for the company's dues, and emphasized the binding nature of quasi-judicial orders unless appealed. The rule was made absolute, and direct service was permitted.
|
