NIRANJAN LAL AGRAWAL Vs. DEPUTY COMMISSIONER (ASSESSMENT)

JUDGEMENT

(1.) NIRANJAN Lal Agrawal, Suresh Nagpal and Nem Chand have jointly filed the present writ petition who claims that they were directors of a company, namely, M/s. Vaishno Devi Rice Mills Pvt. Ltd., Koshi Kala, Mathura. The said company had also taken loan from the Central Bank of India, Koshi Kala Branch, Mathura and its movable and immovable properties were mortgaged with the bank. The company suffered heavy loss with the result that it could not discharge the loan of the bank and the bank filed a case No. 135 of 1998 before the Debts Recovery Tribunal, Jabalpur, wherein an order directing to recover an amount of Rs. 18,41,456.29 along with interest and recovery charges was passed against the company. The Trade Tax Department finalized the assessments of the said company for the assessment years 1995 -96 (U.P. and Central), 1996 -97 (U.P. and Central) and 1997 -98 (U.P. and Central). The said assessment orders were challenged in appeal and thereafter in second appeal before the Tribunal, but unsuccessfully. A sum of Rs. 7,91,939 is outstanding towards the trade tax liability against the said company in respect of the aforestated assessment years. Recovery certificates all dated November 29, 2007 to recover the outstanding trade tax were issued by the respondents. When the Department sought to recover the said amount from the personal assets of the petitioners, the present writ petition has been filed mainly on the ground that the personal assets of the petitioners (erstwhile directors of the company) could not be attached or sold for the satisfaction of the recovery of the dues outstanding against the said company. A supplementary counter -affidavit has been filed stating that none of the directors of the said company has executed any personal security or guarantee towards any trade tax liability of M/s. Vaishno Devi Rice Mills Pvt. Ltd., Koshi Kala, Mathura.

(2.) A counter -affidavit has been filed on behalf of respondent Nos. 1, 2 and 3 wherein the stand taken by them is that the petitioners being the directors of the company were responsible for proper handling of financial matters. The mishandling of the financial matters of the company by the petitioners resulted into loss and ultimately closure of the company as such the petitioners are still obliged to meet out the legal obligations on behalf of the company.

(3.) THE learned standing counsel, on the other hand, supports the impugned action of the Department.