IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 27TH MAY 2009 / 6TH JYAISHTA 1931 OP.No. 9580 of 2003(M) ---------------------- PETITIONER(S): --------------- 1. K.K.CHERIAN, AGED 50 YEARS, S/O. KURUVILA, KUNNATHU HOUSE, MULLENKOLLY P.O., PULPALLY, WAYANAD DISTRICT. 2. P.K.BABY, AGED 37 YEARS, S/O. KURIAKOSE, PALANATTU HOUSE, CHETTAPPARAM P.O., PULPALLY, WAYANAD DISTRICT. 3. M.V.MATHEW, AGED 57 YEARS, S/O. VARKEY, MARLAKUZHIYIL HOUSE, SASIMALA P.O., PULPALLY, WAYANAD DISTRICT. 4. THAMPI V.M., AGED 41 YEARS, S/O. MATHEW, VELIYATHUMALIL HOUSE, PULPALLY, WAYANAD DISTRICT. BY ADV. SRI.A.P.SUBHASH RESPONDENT(S): --------------- 1. STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. ASSISTANT COMMISSIONER OF SALES TAX (ASSMT), SPECIAL CIRCLE-II, KOZHIKODE. GOVERNMENT PLEADER SRI. MOHAMMED RAFIQ THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 27/05/2009, ALONG WITH OP NO. 4157 OF 2003 AND WPC 31171/2004 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 ORDER ON CMP 16680 OF 2003 IN OP 9580 OF 2003 DISMISSED 27.5.2009 SD/-C.N.RAMACHANDRAN NAIR, JUDGE. SD/-C.K. ABDUL REHIM, JUDGE. APPENDIX PETITIONERS' EXHIBITS: EXT.P1 TRUE PHOTOCOPY OF THE SALES TAX ARREARS NOTICE FO R THE PERIOD FROM 1989 TO 1994 ISSUED BY THE 2ND RESPONDENT TO THE FIRST PETITIONER. EXT.P1(a) TRUE PHOTOCOPY OF THE SALES TAX ARREARS NOTICE FOR THE PERIOD FROM 1989 TO 1994 ISSUED BY THE 2ND RESPONDENT TO THE 2ND PETITIONER. EXT.P1(b) TRUE PHOTOCOPY OF THE SALES TAX ARREARS NOTICE FOR THE PERIOD FROM 1989 TO 1994 ISSUED BY THE 2ND RESPONDENT TO THE THIRD PETITIONER. EXT.P1(c) TRUE PHOTOCOPY OF THE SALES TAX ARREARS NOTICE FOR THE PERIOD FROM 1989 TO 1994 ISSUED BY THE 2ND RESPONDENT TO THE FOURTH PETITIONER. EXT.P2 TRUE COPY OF THE LETTER DATED 19.2.2003 SENT BY THE FOURTH PETITIONER TO THE 2ND RESPONDENT. RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S. TO JUDGE. C .N. RAMACHANDRAN NAIR & C. K. ABDUL REHIM, JJ. -------------------------------------------- O.P. Nos. 9580 & 4157 OF 2003 & W. P. C. No. 31171 of 2004 -------------------------------------------- Dated this the 27th day of May, 2009 JUDGMENT Ramachandran Nair,J. The challenge in the connected OPs and WPC is against personal recovery of sales tax against directors of a private limited company on which assessments were made. This Court in the decision reported in (2007) 4 K.L.T. 538 held that recovery of sales tax due from the private limited companies cannot made from the directors if such arrears pertain to the period prior to the introduction of Section 26C i.e. 1.4.1999. Even though Government Pleader submitted that de hors Section 26C recovery can be made from the directors of private limited companies by lifting corporate veil based on the principle laid down by the Supreme Court in MACDOWELL'S case and SREE MEENAKSHI MILLS' case, we do not think these issues can be considered now because tax pertains to assessment years upto 1993-94 and there is nothing on record to hold that the petitioners were the only 2 beneficiaries of the defaulter-companies. Therefore leaving freedom to the Officer to identify and proceed against the directors personally in appropriate cases, based on the decision of the Supreme Court, we allow the OPs and WPC quashing the recovery proceedings against the petitioners. (C.N.RAMACHANDRAN NAIR) Judge. (C. K. ABDUL REHIM) Judge. kk 3