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TMI Blog2017 (8) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... who was a director, during the period for which the tax is due, is also jointly and severally liable to pay the amount. But since the company in question is not in liquidation or is not yet wound up, the impugned proceedings taken against the petitioner cannot be sustained. The fact that the petitioner had resigned from the Directorship of Entel Limited on 08.12.1998 and the same was accepted by the Board of Directors of Entel Limited on 22.12.1998 has not been disputed by the 1st respondent, as it has been admitted by him in the written instructions to the learned Additional Government Pleader - demand not sustainable - petition allowed - decided in favor of petitioner. - W P. No. 9217 of 2006 - - - Dated:- 2-8-2017 - T. S. Sivagnan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of this Court in Sri George J.Mathew Vs The Commercial Tax Officer and Others 2002 [1] CTC 285, wherein, an identical question was considered by this Court and it was held as follows : ... 5. To appreciate the rival submissions, it is necessary to appreciate the scheme of the Act. Section 19-B of the Tamil Nadu General Sales Tax Act gives power to the authorities to recover the tax from the director of the company at the time of such winding up. Section 19-B of the Act reads as follows : 19B. Liability to tax private company on winding up. - Where a dealer is a private company and such company is wound up, every person who was a director of such company at the time of such winding up shall, notwithstanding such winding up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. So according to the said provision, even if any private company is wound up after the Act, the person who was a director, during the period for which the tax is due, is also jointly and severally liable to pay the amount. But since the company in question is not in liquidation or is not yet wound up, the impugned proceedings taken against the petitioner cannot be sustained. 8. A Division Bench of the High Court of Andhra Pradesh in Maddi Swarna v. Commercial Tax Officer, 124 STC 203 [A.P.] while dealing with scope of section 16-B of the Andhra Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forwarded by the respondents to the petitioner-director for recovery of the arrears of tax except in the manner provided in section 16-B. In the instant case, the assessee-company is not in liquidation and it has not yet wound up under the provisions of the Companies Act and, therefore, the necessary conditions to invoke the provisions of section 16-B do not exist and consequently the impugned notice could not be treated to have been issued in exercise of the power conferred on the second respondent by section 16-B of the APGST Act. In the case of Ramnarayan Shahu v. Commercial Tax Officer (FAC) 1990 [78] STC 97 [AP] ; 1990[10] APSTJ 197, it was held that the directors of a private limited company cannot be proceeded against personally in r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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