The Gujarat High Court quashed the attachment of personal property of the Director for realization of Sales Tax Dues as it is illegal and bad in law.
The petitioner, Manharlal Hirajibhai Virdiya is a director of the Patel Rolling Mills Pvt. Ltd. The said Company was inter alia in the business of rolling steel bars.
The Respondent had initiated proceedings against the said Company in respect of the purported outstanding dues of sales tax and a demand of Rs.2.37 crores was raised against the said Company for the outstanding dues of sales tax in respect of the years 1998-99 to 2000-01.
The property is the personal property of the petitioner and respondents have on a premise that the said Company is a partnership firm and the petitioner is a partner therein attached the property belonging to the petitioner. However, the same is on an entirely wrong premise. According to the petitioner, it is not in dispute that the said Company is a private limited company registered under the Companies Act, 1956 and for this reason alone, the Petitioner’s property cannot be attached for the dues of the said Company. Hence, the petitioner has preferred present petition for the aforesaid reliefs.
The division bench of Justice Sonia Gokani and Justice Rajendra M.Sareen while allowing the petition, relied on the decision of Division Bench of this Court rendered in Special Civil Application No.243 of 1991 with Special Civil Application No.3103 of 1991and Special Civil Application No.7578 of 1991 in the case of Mr.Choksi Vs. State of Gujarat, has allowed the said petition and quashed and set aside the impugned notification by holding that the auction of the residential property in question as illegal and bad in law and restrained the respondents from attaching or selling any private property of the Managing Director of the Company for realization of the aforesaid dues.
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