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TMI Blog2016 (7) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... d cannot be held responsible and therefore, could not be proceeded with by way of attachment of property. It emerges that the challenge in the petition appears to be just and proper. No material is brought on record to permit lifting of corporate veil. In fact no such case has been put forth before us by the respondents. The petitioner's personal property could not have been attached by the impugned order. - SPECIAL CIVIL APPLICATION NO. 21206 of 2015 - - - Dated:- 8-7-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : ADITYA A GUPTA and MR AR GUPTA, ADVOCATES FOR THE RESPONDENT : MR. TIRTHRAJ PANDYA, ASSISTANT GOVERNMENT PLEADER ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE A.J. SHASTRI) The petition is directed against an order dated 14.12.2015 by virtue of which the property being residential unit belonging to the petitioner came to be attached by the respondent authorities. The case of the petitioner petitioner is that the petitioner was working as a Computer Engineer in one associate company of Mr. Sunil Kakkad named as Sai Infosystem (India)Ltd. And while the petitioner was working with said Mr.Sunil Kakkad, who lateron floated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer Infocontrol and Service Pvt. Ltd., a company of which, the petitioner no longer is a director. Counsel for the petitioner submitted that quite apart from the ceasing to be the director of the company long back, the petitioner cannot be personally made answerable to the dues of the private limited company. 2. There is nothing in the said notices to suggest that the recovery are sought to be made against the petitioner personally or, through any of his private properties. Both the notices are addressed to the company. Merely because it is also endorsed to the petitioner or, in one such communication, his name is written in the bracket would not permit us to presume that the department is in the process of proceeding petitioner's personal property. 3. The petition is disposed of accordingly. If such a situation arise in future, it is always open for the petitioner to take legal recourse. 3. Relevant para-2 of the above order states that since the name of the petitioner is written in bracketed portion, the same would not permit to presume that the department is in the process of proceeding ahead with the present petitioner. On that basis, the petition came to be dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal capacity. He further contended that under the provisions of the VAT Act, right from sections 49 to 59, none of the provisions empower the authority to fix liability of the director personally and therefore, the order passed by the respondent authority is without authority of law. Learned counsel further relied upon the decision of this Court in the case of M.R.Choksi vs. State of Gujarat reported in (2012) 51 VST 73 , wherein also it is held that personal personal property of a director cannot be attached and based upon this, learned counsel submitted that the order passed by the authority is unjust, illegal, improper and lacks authority. In the background of these facts, learned counsel submitted that the petition may be allowed. 6. As against this, learned Assistant Government Pleader submitted that huge tax demand to the tune of more than ₹ 158 crores is recoverable from the petitioner company. It was pointed out that the petitioner was actively associated with the company as a director. It was also pointed out in the affidavit-in-reply that the petitioner signed certain documents relating to bank transactions. It is also pointed out that when name of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering relevant material, the Court came to the conclusion that a company and its directors are a separate legal entity and liability of the company to pay sales tax on the sale of goods effected by the company cannot be fastened on the director personally. Relevant portion of the judgment reads as under: 8. Coming to the second controversy involved in Special Civil Application No.243 of 1991 and also in Special Civil Application No.7578 of 1991, Mr Hasurkar and Mr Mankad, learned counsel for the petitioners have submitted that since the Company and its Directors are separate legal entities, the liability of the Company to pay sales-tax on sale of goods effected by the Company cannot be fastened on the Directors personally or on the personal properties of the Directors. Referring to the provisions of Section 26, it is submitted that there are special provisions regarding liability to pay tax in certain cases like on the death of the dealer, partition of a Hindu undivided family, dissolution of a firm and transfer of business, termination of the guardianship or termination of the trust, but there is no provision fastening liability of a private Company on its Directors Relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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