A M SALAM Vs. STATE OF KERALA REP BY SECRETARY TAXES DEPARTMENT GOVERNMENT SECRETARIAT THIRUVANANTHAPURAM

JUDGEMENT

(1.) PETITIONERS were the Directors of the fourth respondent Company. The company was incorporated as a Private Limited Company and was converted into a Public Limited Company by Ext.P9 dated 31.7.1995. According to the petitioners, subsequently by Ext.P10 dated 18.4.1998, they resigned from the Directorship of the Company. They are now facing revenue recovery proceedings as per Exts.P1 and P2 notices for realising sales tax dues from the Company for the period 1993-94 to1998-99 which includes orders of penalty as well.

(2.) THE contention raised by the learned counsel for the petitioners is that they have now resigned from the Directorship of the Company and cannot be held liable for the penalty due from the Company. It is also contended that in any case, the Company having been converted into a Public Limited Company by Ext.P9, the Directors cannot be proceeded against. Further he also contended that the Director cannot be proceeded against without even giving a notice of the proposed action against him.

(3.) THEREFORE, I dispose of this writ petition with a direction that Exts.P1 and P2 will be treated as notices and it will be open to the petitioners to file their objections to the third respondent. This shall be done as expeditiously as possible, at any rate within two weeks from today. If objections are filed as above, the third respondent will consider the same with notice to the petitioners and after affording them an opportunity of hearing pass a reasoned order justifying the proceedings. Needless to say that now that Exts.P1 and P2 are directed to be treated as notices, further coercive action will be deferred until orders are passed as directed above. Petitioners shall produce a copy of this judgment along with a copy of the writ petition before respondents 3 and 4 for compliance.