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2014 (3) TMI 949 - HC - VAT and Sales TaxRecovery of tax dues Liability of Director - Provision to recover company tax dues from the personal assets of the Director Held that - Judgment in M/s Meekin Transmission Ltd., Kanpur Nagar vs. State of U.P. and others 2008 (2) TMI 406 - ALLAHABAD HIGH COURT followed Company has a separate juristic personality and there is no provision in the U.P. Trade Tax Act under which the dues of the dealer Company could be recovered from the personal assets of a Director - Recovery has been issued against the Company, showing the name inter alia of the petitioner as a proprietor No need to interfere with the enforcement of the recovery citation against the Company and this judgment is confined only in respect of the enforcement of the recovery citation against the personal assets of the petitioner Petition allowed and set aside the recovery citation only insofar as it operates against the personal assets of the petitioner Decided in favour of assessee.
Issues: Challenge to recovery citation against personal assets of a director of a private limited company under the U.P. Value Added Tax Act, 2008.
The judgment concerns a writ petition filed to challenge a recovery citation issued by the Tehsildar against the personal assets of a director of a private limited company, Hasan Steels & Alloys (Pvt.) Limited, under the U.P. Value Added Tax Act, 2008. The petitioner, a former director of the company, argued that tax dues of the company cannot be recovered from personal assets. The legal position was not disputed, citing a previous Division Bench judgment that a company has a separate legal identity. The Act defines a 'dealer' to include a company, and the company in question is a registered dealer. The court noted that Section 38 of the Act makes directors liable for tax only in case of liquidation, which does not apply in this scenario as the company is not in liquidation. The recovery citation was issued against the company, mentioning the petitioner as a proprietor, but the court clarified that the judgment only pertains to recovery against the personal assets of the petitioner. Consequently, the court allowed the petition and set aside the recovery citation insofar as it pertains to the personal assets of the petitioner, disposing of the case with no costs awarded.
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