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TMI Blog1954 (10) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... nce punishable under section 15 ( b ) of the Madras General Sales Tax Act. The case against them was that the company exported groundnut oil through Messrs. Raleigh Brothers and in respect of that transaction sales tax to the tune of Rs. 3,285-6-3 was payable, that notice in Form B demanding payment of the tax was served upon the petitioner, the managing director, on 16th March, 1950, and that in spite of it this amount was not paid within the time allowed. One of the defences put forward on behalf of the petitioner was that the company was not liable to pay the tax demanded as it was already collected from their agents, Messrs. Raleigh Brothers. The pleas raised on behalf of other accused are not material in this enquiry, as they have al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be prosecuted for default by the firm. That ruling is not apposite for the reason that in this case it is the company that is prosecuted and not particular individuals alone. Further, the learned Judge has not decided the question whether an individual partner is personally liable for payment of taxes. To the same effect is the ruling in Behara Latchanna Patnaick s case ( supra ) Somasundaram J. relied on Public Prosecutor s case ( supra ) in support of his conclusion that some of the partners alone cannot be prosecuted for failure to pay taxes assessed on a firm. So these rulings do not in any way help the petitioner. On the other hand, there is an incidental remark in the judgment of Mr. Justice Somasundaram that every partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividuals constituting the company cannot be held responsible for the default in payment of such taxes. In this context, a passage from Lindley on Companies, 6th edition, at page 1229, extracted at page 323 in Harihar Prasad v. Bansi Missir [1931] A.I.R. 1931 Pat. 321 , is apposite: "The Society, (speaking of an Industrial Provident Society spoken of as the Co-operative Societies in England, see Halsbury's Laws of England, Volume 17, page 3) being incorporated, must sue and be sued by its corporate name; and its members are individually liable for its debts and engagements only so far as the statute allows. As in the case of companies registered under the Companies Act, 1862, so in the case of societies registered under the Act now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll revenues, taxes, cesses and rates whether payable to the Union of India or a State, or to a local authority, due from the company at the date hereinafter mentioned and having become due and payable within the twelve months next before that date." It is implicit in this section that even revenues, taxes, cesses and rates payable to the State are only recoverable from the assets of the company. Therefore the directors cannot be personally proceeded against in respect of revenues, taxes etc. The learned Public Prosecutor sought to support the judgment of the lower court on the basis of sections 8-B(2) and 15( h ) of the Madras General Sales Tax Act, and Section 386 of the Criminal Procedure Code. I do not think these sections have any r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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