IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 29TH MAY 2008 / 8TH JYAISHTA 1930 OP.No. 13339 of 2001(K) ----------------------- PETITIONER: ------------ PAUL, K.U., SON OF ULAHANNAN UTHUP, KOYIKARAKANDATHIL,'UDAYAM' EDAPPALLY, THRIKKAKARA ROAD, KOCHI 24, NOW RESIDING AT HOUSE NO. 3/267-A, THRIKKAKARA PANCHAYATH, WEST ROAD, CHEMBUMUKKU SOUTH KAKKANAD WEST, KAKKANAD P.O., KOCHI 30. BY ADV. SRI.C.S.MANU RESPONDENTS: ------------- 1. DISTRICT COLLECTOR, ERNAKULAM. 2. DEPUTY TAHSILDAR (RR), KANAYANNUR TALUK, ERNAKULAM. 3. VILLAGE OFFICER, THRIKKAKARA NORTH VILLAGE, ERNAKULAM DIST. 4. SALES TAX OFFICER, CHALAKKUDY. BY GOVERNMENT PLEADER SRI. TEKCHAND THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 29/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 ORDER ON CMP 21239 OF 2001 IN OP 13339 OF 2001 DISMISSED 29.5.2008 SD/-C.N.RAMACHANDRAN NAIR, JUDGE. APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE DEMAND NOTICE DATED 30.1.2001ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- O.P. NO. 13339 OF 2001 -------------------------------------------- Dated this the 29th day of May, 2008 JUDGMENT Petitioner is challenging recovery proceedings for recovery of arrears of sales tax due for 1994-95. The amount is above Rs. 3.6 lakhs in 2001. Petitioner admittedly is the Managing Director of the company which is liable to pay arrears of tax. Recovery is proceeded against the Managing Director of the company under Section 26C of the KGST Act. Even before the introduction of Section 26C directors of private limited company could be proceeded against for recovery of arrears of sales tax by virtue of law declared by the Supreme Court in SREE MEENAKSHI MILLS' case and MACDOWELL's case, if company is used as a cover to evade payment of tax. Petitioner's daughter challenged the recovery proceedings in O.P.no. 15310 of 2000 and the said O.P. was disposed of on 5.9.2005 with direction to the respondents to identify the property of the defaulter company and that of the directors and proceed for recovery, if directors were found liable. If recovery is not effected pursuant to the above said judgment, 2 then it is gross irresponsibility on the part of the respondents who are in charge of recovery proceedings. Since connected O.P. is disposed of, this O.P. is disposed of with direction to respondents to proceed for recovery under Section 26C of the KGST Act or in accordance with general law declared by the Supreme Court in the above two decisions after issuing notice to the parties. If recovery is not effected the Government should proceed against recovery authorities. However, the above directions will not stand in the way of the defaulters going in for the benefit under the Amnesty scheme. Government Pleader will forward a copy of this judgment to the District Collector for compliance. (C.N. RAMACHANDRAN NAIR) Judge kk 3