THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
LIABILITY TO PAY IN CERTAIN CASES
Section 89:
Liability of directors of private company.
(1) Notwithstanding anything contained in the Companies Act, 2013,
where any tax, interest or penalty due from a private company in respect of any
supply of goods or services or both for any period cannot be recovered, then,
every person who was a director of the private company during such period
shall, jointly and severally, be liable for the payment of such tax, interest
or penalty 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.
(2) Where a private company is converted into a public company and the tax,
interest or penalty in respect of any supply of goods or services or both for
any period during which such company was a private company cannot be recovered
before such conversion, then, nothing contained in sub-section (1) shall apply
to any person who was a director of such private company in relation to any
tax, interest or penalty in respect of such supply of goods or services or both
of such private company:
Provided that nothing contained in this sub-section shall apply to any personal
penalty imposed on such director.