9911796707
TMI Blog2015 (11) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... eking recovery of outstanding sales tax dues of respondent No. 4 which is in liquidation from the petitioner as an arrears of land revenue. 2. Put shortly, the facts necessary for adjudication of the present petition as narrated therein may be noticed. M/s. Bhagwati Wooltex Pvt. Ltd. was incorporated in the year 1989 and was eligible to sales tax exemption under section 13B of the Haryana General Sales Tax Act, 1973 (in short, "the Act") read with rule 28A of the Haryana General Sales Tax Rules, 1975 (hereinafter referred to as "the Rules") valid from December 23, 1994 to December 22, 2001 for a quantum of Rs. 34,00,000. The petitioner was a director in the said company. The company could not carry on production and, therefore, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said notice alleging that since the company is in liquidation, the sales tax dues cannot be recovered from him. Accordingly, respondent No. 3 issued summons dated November 18, 2013 (annexure P9) in pursuance of a surety which was given by the petitioner for recovery of Rs. 1,40,000 and dated November 21, 2013 (annexure P10) to the petitioner for the recovery of outstanding dues amounting to Rs. 89,29,051 relating to M/s. Bhagwati Wool tex Pvt. Ltd. on account of sales tax liability for the exemption period as arrears of land revenue. Hence, the present writ petition. The writ petition was contested by the respondents by filing two separate replies. Respondent Nos. 2 and 3 in the written statement pleaded that the petitioner had alter n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11) has been issued under section 8(5) of the CST Act. 3. The learned counsel for the petitioner submitted that there was no provision in the Act or Haryana Value Added Tax Act, 2003 (hereinafter refer red to as "the VAT Act") whereby the director of a company which was in liquidation could be fastened with liability of the company. Reliance was placed upon the following judgments: (1) Tikam Chand Jain v. State Government of Haryana [1987] 67 STC 388 (P&H); [1987] 62 Comp Cas 601 (P & H); (2) Mukesh Gupta v. State of Haryana [1996] 8 PHT 326 (P&H); (3) Arun Kapoor v. Assistant Collector [2002] 128 STC 339 (P&H); (4) Om Parkash Walecha v. State of Haryana [2008] 16 VST 530 (P&H); [2008] 145 Comp Cas 799 (P & H); (5) A. P. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so being recovered from the petitioner as the liability had not been discharged where he had stood as surety. 6. In rebuttal, learned counsel for the petitioner relied upon notification dated September 4, 1995 (annexure P11) issued under section 8(5) of the CST Act whereby it has been provided that no CST can be recovered from him, where valid exemption certificate under rule 28A of the Rules has been issued and no tax under the CST Act has been charged by such dealer on the sale of goods manufactured by him. It was also argued that in view of notification dated September 4, 2005 (annexure P11), no recovery can be effected even under section 18 of the CST Act. Further, alternatively it was urged that even under section 18 of the CST Act if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which provides for recovery from the director of a private limited company which is in liquidation under certain circumstances. 9. Similar view has been expressed in Mukesh Gupta v. State of Haryana [1996] 8 PHT 326 (P&H), Tikam Chand Jain v. State Government of Haryana [1987] 67 STC 388 (P&H); [1987] 62 Comp Cas 601 (P & H), Arun Kapoor [2002] 128 STC 339 (P&H), Om Parkash Walecha [2008] 16 VST 530 (P&H); [2008] 145 Comp Cas 799 (P & H) and Varuni Biomass Energy Products Private Ltd.'s case [2009] 19 VST 484 (Mad). 10. Therefore, in view of the above legal position, the recovery on account of sales tax liability under the Act or VAT Act of M/s. Bhagwati Wooltex Pvt. Ltd. relating to exemption period cannot be recovered from the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (annexure P11) issued under section 8(5) of the CST Act. 12. Under issue No. (iii), the liability of the petitioner on account of non payment of the amount due from the principal where he had stood surety cannot be doubted. However, in the absence of any notice having been issued before serving annexure P9, the action cannot be legally sustained being violative of principles of natural justice. It shall be open for the respondents to take action for recovering the aforesaid amount of Rs. 1,40,000 for which the petitioner had stood surety after affording an opportunity of hearing to the petitioner in accordance with law. 13. The preliminary contention relating to availability of alternative plea, it needs to be observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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