2019 Supreme(All) 993

IN THE HIGH COURT OF ALLAHABAD
Sudhir Agarwal, Kaushal Jayendra Thaker, JJ.
Arun Kumar Rathi - Appellant
Vs.
State Of U.P. And Others - Respondent
Writ Tax No. 839 of 2015
Decided On : 09-07-2019

Headnote:

Constitution of India, 1950 – Article 226 – Income Tax Appeal – Assessment Proceedings – Petition filed contending that Company owe some tax dues to respondents-department but instead of recovering the same from assets of Company, recovery certificate/notice has been issued by authorities to recover the said amount from personal assets of petitioner though petitioner has neither given any personal guarantee for recovery of the dues of Company nor is otherwise responsible to clear the dues of Company – Appeal – Held, Learned Standing Counsel, when questioned, could neither show any provision under which Directors' personal assets could have been proceeded to recover dues of Company nor any binding precedent, which has taken any different view – Recovery certificate as well as modified recovery certificate hereby set aside – Court clear that this order will not preclude respondents from proceeding to recover outstanding dues from assets of Company in accordance with law or to follow such other procedure or by resorting to such mode and manner, as permissible in law – Writ petition is allowed. [Paras 10, 11 and 12]

Facts of the case:

Facts stated in the writ petition in brief are, that petitioner is one of the Directors of Company, which had its registered office at 135, Third Floor, Banjara Basti, New Delhi. Company was duly registered with Trade Tax Department, subsequently named as Commercial Tax Department, in State of Uttar Pradesh. For certain Assessment Years, Company owe some tax dues to respondents-department but instead of recoverying the same from assets of Company, recovery certificate/notice has been issued by authorities concerned at Delhi to recover the said amount from personal assets of petitioner though petitioner has neither given any personal guarantee for recovery of the dues of Company nor is otherwise responsible to clear the dues of Company.

Findings of the case:

Learned Standing Counsel, when questioned, could neither show any provision under which Directors' personal assets could have been proceeded to recover dues of Company nor any binding precedent, which has taken any different view – Recovery certificate as well as modified recovery certificate hereby set aside – Court clear that this order will not preclude respondents from proceeding to recover outstanding dues from assets of Company in accordance with law or to follow such other procedure or by resorting to such mode and manner, as permissible in law.

Result: Writ petition is allowed