Case Law Details
Mukesh D. Ramani Vs State of Maharashtra (Bombay High Court)
It is settled law that liability for duty of the company cannot be fastened upon the Directors of the company unless there is statutory provision to that effect. Since the BST Act did not contain any provision to the effect making the Directors liable for the dues of the company, no amount is recoverable under the BST Act from the Directors of the company for the dues recoverable from the Company. There were no provisions in the BST analogous to Section 44(6) of the MVAT Act or Section 18 of the CST Act or Section 89 of the MGST Act. Therefore, even for a moment we assume that the BST Act has not been repealed and continues to be in force, even then no recovery would lie in law against the Directors of the company for the company’s dues. As correctly submitted by Mr.Sridharan what cannot be done directly cannot be done indirectly. Therefore, no amounts are recoverable from petitioner as Director of the company under the BST Act. Even the Punjab and Haryana High Court in Narinder Singh vs. Union of India2 in paragraph nos.5 and 7 held [as has been held by this court in Satish D. Sanghavi (supra)] as under :
5. It is well settled that in the absence of any specific provision in the statute, the duty/penalty liability of the company cannot be recovered from the assets of its director. The Director is not personally liable towards liability of the company. This court while delving into an identical issue in Subhash Goyal vs. State of Haryana and Others, 2014(4) PLR 343 held that in the absence of taking any specific recourse to proceedings under Section 18 of the Central Sales Tax Act, 1956 and any valid order for effecting recovery of arrears of sales tax from the directors of a private limited company in liquidation, the proceedings relating to recovery of arrears of tax from the petitioner being a director were not permissible in law.
7. In view of the above, the action of the respondents in compelling the petitioner to clear the dues of the company cannot be sustained. The petition is allowed. However, the respondents shall be at liberty to proceed against the company for clearance of its dues in accordance with law.
(emphasis supplied)
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