( 1 ) THE two petitioners were the Directors of M/s. Drill Rock Engineering Company (P) Ltd. Secundcrabad, from 15-9-1976 till 1-7-1984. On 1-7-1984 they have resigned from the Board of Directors of the said company. The Company was distributor for M/s. Consolidated Pneumatic Tools Company India Limited for their compressors and pneumatic tools. For the assessment years 1978-79 to 1988-89 thecompany was due income-tax to the Department of Income-Tax. There was also settlement before the Settlement Commission under the Income-Tax Act. The Board of Directors who assumed office after the resignation of the petitioners agreed before the Settlement Commission for total tax liability of Rs. 64,27,371. 00 for the assessment years 1978-79to 1988-89. Pursuant to the agreement before the Settlement Commission proceedings were initiated for recovery of the said amount against the Company and the said proceedings are pending. However, by the impugned proceedings dated 10-2-1998 the Assistant Commissioner of Income-tax issued a notice under Section 179 of the Income-Tax Act proposing to recover the amount of Rs. 64,27,371. 00 from the petitioners. Hence the writ petition.

( 2 ) THE main argument of the learned Counsel for the petitioners is that under Section 179 of the Income-Tax Act the liability of the Directors arises only in cases where the tax cannot be recovered from the assets of the Company. It is only on a finding arrived at by the competent authority that the tax due from the Company cannot be recovered from the assets of the Company, the Assessing Officer can proceed against the Directors personally and individually. In the absence of such a finding the Assessing Officer does not get the jurisdiction to proceed against the Directors personally. While the Counsel for the Revenue in his counter though admitted that the recovery action is continuing in the case of the Company, contended that it is only after taking all possible steps for recovery, as a last resort, the provisions of Section 179 were invoked for making the Directors of the Company in the relevant previous years jointly and severally liable for the taxes of the Company. He further submitted that he has a right of revision under Section 264 of the Income-Tax Act and therefore, the writ petition cannot be entertained, hi addition he submitted that they have initiated action against the Company by issuing notice under Section 221 on 1/06/1989 and notice under Section 226 (3) notice to the Executive Engineer, Electricity Civil Construction Division-II, Anparathermal Project, U. P. S. E. B. , Anpara (Mirzapur), Uttar Pradesh, on 22-3-1990. He therefore submitted that it is not a case where this Court could interfere under Article 226 of the Constitution of India.

( 3 ) FROM the counter it is clear that the proceedings against the Company have not yet been concluded and they are pending. In this context it is necessary to refer to the language used in Section 179 of the Income-Tax Act. "179. Liability of directors of private Company in liquidation: (1) Notwithstanding anything contained in the Companies Act, 1956, where any tax due from a private Company in respect of any income of any previous year or from any other Company in respect of any income of any previous year during which such other Company was a private Company cannot be recovered, then, every person who was a director of the private Company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the Company. (2) Where a private Company is converted into a public Company and the tax assessed in respect of any income of any previous year during which such Company was a private Company cannot be recovered, then, nothing contained in sub-section (1) shall apply to any person who was a dire