9911796707
TMI Blog2005 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order made under section 179 by the respondent is quashed and set aside. The respondent is prohibited from proceeding any further in consequence of the impugned order - The petition is allowed accordingly X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, held that the petitioner was liable jointly and severally with other directors for payment of arrears of tax of Rs. 27,686 outstanding in the case of company for the assessment year 1996-97 along with interest under section 220(2) of the Act. Mr. J. P. Shah, learned advocate for the petitioner, has submitted that apart from the fact that the petitioner is not liable for the demand relatable to subsequent years, even for the assessment year 1996-97, the petitioner having admittedly given up the post of a director with effect from February 25, 1996, the petitioner could not be held liable to satisfy the demand in relation to income which would accrue or arise only at the end of the accounting period of the company and hence, accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overy of outstanding dues from the company, including attachment of the properties of the company more particularly described in the order of attachment dated March 8, 2004 (annexure R-8). He, therefore, submitted that considering the fact situation, the impugned order made under section 179 of the Act was perfectly justified and no interference was called for. In the case of Bhagwandas J. Patel v. Deputy CIT [1999] 238 ITR 127 this court has enunciated the law on reading of the provision of section 179 of the Act in these words: "A bare perusal of the provision shows that before recovery in respect of dues from the private company can be initiated against the directors, to make them jointly and severally liable for such dues, it is neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the attachment order the property attached is specified as under: "Specification of property.-(1) Right, title and interest in immovable properties i.e., land, factory shed and building along with machinery, furniture and fixtures, equipments and electrical fittings situated at B/225, GIDC Waghodia, Distt. Baroda." The affidavit-in-reply is silent as to what is the total value of the immovable properties as well as other assets attached under the order of attachment dated March 8, 2004. In these circumstances, it is not possible to accept the stand of the respondent that despite best efforts the taxes due from the company cannot be recovered. As laid down by this court the phrase "cannot be recovered" requires the Revenue to est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department can initiate action against the petitioner only after exhausting its remedies against the company and its assets and before doing so, no proceeding can be taken against the petitioner. There is no merit whatever in this contention as section 179(1) of the Act makes the liability joint and several." Thus, it can be seen that the Madras High Court is relying upon the phrase used in the later part of section 179 of the Act wherein it is held that every person who was a director of the company shall be "jointly and severally" liable. The aforesaid decision does not deal with the earlier portion of the provision which relates to recovery or inability to recover, from the company. In fact the said decision does not record any reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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