- (1.) By way of instant petition filed under Articles 226/227 of the Constitution of India, the petitioner has prayed for issuance of a writ in the nature of certiorari for quashing the summons dated 18.11.2013 (Annexure P-9) and dated 21.11.2013 (Annexure P-10) issued by respondent No. 3 seeking recovery of outstanding sales tax dues of respondent No. 4 which is in liquidation from the petitioner as an arrears of land revenue. Put shortly, the facts necessary for adjudication of the present petition as narrated therein may be noticed. M/s. Bhagwati Wooltex Pvt. Ltd. was incorporated in the year 1989 and was eligible to sales tax exemption under Section 13-B of the Haryana General Sales Tax Act, 1973 (in short "the Act") read with Rule 28-A of the Haryana General Sales Tax Rules, 1975 (hereinafter referred to as "the Rules") valid from 23.12.1994 to 22.12.2001 for a quantum Of Rs. 34,00,000/-. The petitioner was a Director in the said Company. The Company could not carry on production and, therefore, the Sales Tax Exemption granted to it was withdrawn vide order dated 24.2.2004 (Annexure P-1 Colly) passed by the Deputy Excise and Taxation Commissioner (ST), Pani-pat. The appeal filed against the said order was dismissed by the Joint Excise and Taxation Commissioner (A) vide order dated 1.8.2005 (Annexure P-2). Against the order dated 1.8.2005, the petitioner filed an appeal (Annexure P-3) before the Haryana Tax Tribunal (for brevity "the Tribunal"). Company Petition No. 130 of 2005 was filed against M/s. Bhagwati Wooltex for winding up of the company. This Court vide order dated 27.7.2006 (Annexure P-4) admitted the petition and appointed Official Liquidator to take over the assets of the company. Since the assets and liabilities were taken over by the Official Liquidator after 27.7.2006, he was asked to pursue the matter before the Tribunal and the Tribunal was informed in this regard vide letter dated 29.12.2006 (Annexure P-5). The Official Liquidator directed the petitioner to hand over all the books of account vide letter dated 31.7.2007 (Annexure P-6). The assessing authority issued notice dated 10.10.2013 (Annexure P-7) for recovery of outstanding sales tax dues of the Company amounting to Rs. 88,30,010/- under the Haryana VAT Act and Rs. 99,041/- on account of Central Sales Tax (CST) under the Central Sales Tax Act, 1956 (in short "CST Act") from the petitioner. The petitioner filed reply dated 19.10.2013 (Annexure P-8) to the said notice alleging that since the Company is in liquidation, the sales tax dues cannot be recovered from him. Accordingly, respondent No. 3 issued summons dated 18.11.2013 (Annexure P-9.) in pursuance to a surety which was given by the petitioner for recovery of Rs. 1,40,000/- and dated 21.11.2013 (Annexure P-10) to the petitioner for the recovery of outstanding dues amounting to Rs. 89,29,051/- relating to M/s. Bhagwati Wooltex Pvt. Ltd. on account of sales tax liability for the exemption period as arrears of land revenue. Hence, the present writ petition: The writ petition was contested by the respondents by filing two separate replies. Respondents No. 2 and 3 in the written statement pleaded that the petitioner had alternative remedy of appeal against the impugned summons. The liability of tax under the Act/VAT Act is Rs. 50,19,719/- and under CST Act is Rs. 39,09,332/- including interest, thus total- ling Rs. 89,29,051/-. Further, it was pleaded that the Director of a company in liquidation was liable for the outstanding tax as per the provisions of Section 18 of the CST Act. Respondent No. 4 in the written statement pleaded that realizable assets were not available in the hands of the Official Liquidator and, therefore, the Official Liquidator was not in a position to settle the dues of any creditors. With regard to tax dues pertaining to the period prior to winding up order dated 27.7.2006, the same could be recovered by the authorities in accordance with law. Further, it was pleaded that the Official Liquidator has filed an application under Section 481 of the Companies Act, 1956 before this Court for dissolution of the Company (in liquidation) and the same had been published in the newspaper vide order dated 16.8.2013 passed by this Court. The other averments made in the petition were controverted and prayer for dismissal of the writ petition was made. The petitioner filed replication denying the averments made in the written statement by respondents No. 2 and 3 and reiterated those of made in the writ petition. It has further been stated in the replication that recovery of tax cannot be made from the Director in view of the fact that a notification dated 4.9.1995 (Annexure P-11) has been issued under Section 8(5) of the CST Act.
(2.) Learned counsel for the petitioner submitted that there was no provision in the Act or Haryana Value Added Tax Act, 2003 (hereinafter referred to as "VAT Act") whereby the Director of a company which was in liquidation could be fastened with liability of the company. Reliance was placed upon the following judgments:-- "1. Tikam Chand Jain v. State Government of Haryana and another, 1987 67 STC 388; 2. Mukesh Gupta v. State of Haryana,1996 8 PHT 326; 3. Arun Kapoor v. Assistant Collector and another, 2002 128 STC 339; 4. Om Parkash Walecha v. Sate of Haryana and others, 2008 16 VST 530; 5. A.P. Raheja and another v. State of Haryana and others, 2010 29 VST 103; 6. Nov Bharat Enterprises Ltd. v. Sales Tax Officer, Ward No. 18, New Delhi, 1987 66 STC 252; 7. M. Ishwarlal & Co. and others v. State of Madras and others, 1973 32 STC 377; 8. Varuni Biomass Energy Products Private Ltd. v. District Collector, Dindigul and others, 2009 19 VST 484."
(3.) On the other hand, learned counsel for the revenue supported the issuance of summons to the petitioner for recovery of the amount and relied upon Section 18 of the CST Act which reads thus:-- "Section 18- Liability of directors of private company in liquidation.-Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), when any private company is wound up after the commencement of this Act, and any tax assessed on the company under this Act for any period, whether before or in the course of or after its liquidation, cannot be recovered, then, every person who was a director of the private company at any time during the period for which the tax is due shall be jointly and severally be 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.";