9911796707
TMI Blog1964 (7) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... an Companies Act can be arrested for the realisation of arrears of sales tax due by the limited company. The limited company in the present case is the New Age Publication Limited, Patiala, and Shri Surinder Nath Khosla, Advocate, its managing director. In the return, the grounds on which the impugned action has been sought to be justified is that the petitioner had himself been actually carrying on the business in his personal capacity under the guise of Messrs New Age Publication Limited, Patiala. A further plea sought to be raised is that the petitioner was himself a dealer liable to pay the tax because he had himself been carrying on the business; this liability was sought to be supported under rule 40(1) of the Rules framed under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not personally liable for its debts or liabilities. Where sales tax has been assessed on the company, proceedings for its recovery can only be taken against the assets of the company and any proceedings taken against the shareholders or their personal assets are void and against law. Reference to section 6 of the Punjab General Sales Tax Act (No. 2 of 1963) made by the respondents' learned counsel appears to me to be wholly irrelevant because it merely provides for cases where a dealer is an undivided Hindu family, firm or other association of persons which has been partitioned, dissolved or disrupted. Obviously, it can have no reference to a company registered under the Indian Companies Act. An incorporated company, as is well-known, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficulty in realising the arrears from the company can scarcely by itself constitute a lawful ground for the impugned action; indeed no law has been shown by the respondents in support of it. It is well for those wielding power of the State to remember that they are also under an obligation to keep themselves within the bounds of law and to cultivate the spirit of the rule of law. This attitude of mind on their part is more necessary than ever in a set-up like ours, for if they transgress the law, then the whole society suffers. On the arguments addressed at the Bar, this petition cannot but succeed and allowing the same we direct that the warrants for the petitioner's arrest for the realisation of the sales tax due from the New Age Publi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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