By the Court.—Aggrieved by the notice dated 23.5.2003 (Annexure-7 to the writ petition) issued by the Assistant Collector (Collection) Trade Tax, Kanpur to the petitioner No. 2, the present writ petition has been filed by the petitioners seeking a writ of certiorari for quashing the said notice. Further a writ of mandamus has been sought directing the respondents not to realise any amount of trade tax from the petitioners till finalization of winding up proceedings pending before the respondents authorities.

2. The petitioner No. 1, M/s. Meekin Transmission Ltd. (hereinafter referred to as the “Company”) is a company registered under the Indian Companies Act, 1956 (in short the “Act”) and engaged in the business of manufacturing of Automotive Gears. Initially it was incorporated as a Private Limited Company on 31.3.1983 and was converted in a Public Limited Company subsequently. In 1991 it became a sick unit and made a reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the “1985 Act”) to the Board for Industrial and Financial Reconstruction (hereinafter referred to as “BIFR”) which was registered as Case No. 109 of 1991. The Industrial Development Bank of India (hereinafter referred to as the “IDBI”) was appointed as operating agency for submitting rehabilitation scheme vide order dated 2.6.1992. However, it appears that during the period rehabilitation matter was pending before BIFR, the petitioner-Company continued with the business but did not pay sales tax (now termed as trade tax) for the period of 1993-94 to 1997-98 which comes to about Rs. 42.88 lacs. The aforesaid tax was allowed to be paid in instalments. The petitioner No. 1 deposited first instalment of Rs. 5.36 lacs on 30.4.1998 but thereafter no subsequent instalment was paid. However, on its request, the respondent-State of U.P., vide letter dated 1.11.1999, rescheduled instalments commencing from 30.10.1999 and onwards, and, the petitioner No. 1 was required to pay the entire balance amount in five annual approximately equal instalments. The petitioner No. 1 still failed to deposit any of such instalment. Consequently, a recovery certificate was issued against the petitioner No. 1 on 24.2.2003. The respondent No. 5 also sent a letter dated 24.2.2003 to the petitioner No. 2 stating that he is the Director of the Company and in view of the law laid down by this Court in Writ Petition No. 138 of 1994, M/s. Raghunath Talwar v. State of U.P., decided on 4.3.1998, the dues of the Company can be recovered from the Directors therefore, the petitioner No. 2 should pay the entire amount failing which recovery proceeding shall be initiated against him. The petitioner No. 2 sent reply dated 10.3.2003 stating that the recovery from the Directors of the Company is not permissible in law, therefore, notice dated 24.2.2003 be revoked. However, the respondent No. 5 issued another notice dated 23.5.2003 referring to this Court’s judgment dated 13.3.2003 in Writ Petition No. 382 of 2003, Naresh Chander Gupta v. District Magistrate and others, 2003 (22) NTN 358, stating that the recovery can be made from the Directors of the Company, therefore, the petitioner No. 2 is liable to pay entire trade tax dues of the Company. Aggrieved of the said notice, the present writ petition has been filed.

3. Learned Counsel for the petitioners vehemently contended that the petitioner No. 2 is only a Director of the Company and as such, is not personally liable for the payment of dues of the Company. As shareholder his liability is limited to the extent of shares which he held and, therefore, no recovery of dues of the Company can be made from the personal assets of the petitioner No. 2. Placing reliance on Division Bench decisions of this Court in Bhikhu Ram Jain, Delhi v. State of U.P. and others, 2001 U.P.T.C. 364 and G.C. Mehrotra v. Dy. Collector (Collection), Sales Tax, 1997 U.P.T.C. 1217, he contended that the dues