9911796707
TMI Blog2024 (7) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... Valsad. The respondent No. 1 is the State of Gujarat. The respondent No. 2 is an officer of the State of Gujarat entrusted with the task of collecting tax under the Value Added Tax Act, 2005 (for short, "the VAT Act"). [2.2] The petitioner was appointed as an Additional Director in Rajvi Paper Traders Pvt Ltd (RPTPL) on 24th December 2020. RPTPL had certain outstanding dues under the VAT Act for the years 2014-15 and 2015-16. the tax dues were on account of the fact that one of the suppliers had not paid tax on sales made to RPTPL because of which Input Tax Credit came to be disallowed in the case of RPTPL resulting into demand despite RPTPL having already paid tax to such supplier. [2.3] RPTPL challenged the assessment orders by way of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated 7th March 2023. Learned advocate Mr. Uchit Sheth for the petitioner submitted that the respondents authorities could not have issued notice for recovery of outstanding dues under the VAT Act of the company from the petitioner who was not an Additional Director for the period from 2014-15 and 2015-16 pertaining to the RPTPL company which is a separate legal entity. It was further submitted that the petitioner was never a Director of the company at the relevant time when the demand was raised under the provisions of the VAT Act. The petitioner was an Additional Director for only one year from 24th January 2020 whereas the outstanding dues are for the years 2014-15 and 2015- 16. It was submitted that the prosecution under Section 86 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above factual position, it is not necessary to examine the controversy at length. Suffice it to state that the respondents are not in a position to point out any statutory provision empowering the sales-tax authorities to fasten the liability of Company on its Directors in the matter of payment of sales-tax dues. There appears to be substance in the submission made on behalf of the petitioners that Section 26 containing the said provision regarding liability to pay tax in certain cases covers several contingencies such as the liability in respect of the business carried on by an individual dealer after his death, the liability in respect of the dues where the dealer was an HUF and there is partition amongst various members or group of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined. In neither of the two petitions raising the controversy, the authorities have passed any specific order fastening the liability on the Directors personally, much less any factual foundation has been laid to invoke the doctrine of lifting the corporate veil. Hence it is not necessary to dilate on the said principle any further." [7] Therefore, the aforesaid decision is followed in the case of C V Cherian (supra), wherein it is observed as under: "2. After hearing the learned counsel appearing for the parties and after going through the affidavit filed by the State respondent, it appears that it is not the case of the State that the property in question at any point of time belonged to the company nor is it the case that the Manag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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