211.
Abc
Pvt Ltd, a private company was ordered to be wound up on 1.5.2017 by court &
the liquidation proceedings were initiated. The tax was due for the period
1.1.2017-30.4.2017. Following were the
liabilities arisen on:
a.
before
liquidation- 2 lacs
b.
during
liquidation- 1 lacs
c.
after
liquidation- 5 lacs
Discuss
the taxability for such dues if:
i.
A
is director on 1.5.2017
ii.
B,
director of company, resigned on 15.12.2016
iii.
C,
director of company, resigned on 15.3.2017
iv.
D,
director of company, proves that there was no negligence/ misfeasance/ breach of
duty on his part in relation to affairs of company
v.
E
was appointed as director on 1.2.2017
vi.
F
was appointed as director of company on 1.6.2017
As
per section 88(3) of the CGST Act, every director of the company during at any
time during the period for which the tax was due shall jointly & severally
liable to pay Tax/ Interest/ Penalty, unless he proves to the satisfaction of
the commissioner that such non-recovery cannot be attributed to any gross
neglect, mis feasance or breach of duty on his part in relation to the affairs
of the company.
(a)
A is jointly & severally liable to pay.
(b)
B left the company before the tax liability arouse, thus, he is not liable to
pay such tax liability.
(c)
C was the director of the company during the period when tax liability has
arisen. Thus, he is jointly & severally liable.
(d)
D, is not liable as there was no
negligence/ misfeasance/ breach of duty on his part in relation to affairs of
company
(e)
E
was appointed as director on 1.2.2017. Since he was director during such period
of tax due, thus,
he is jointly & severally liable.
(f)
F
was appointed on 1.6.2017 & tax was due for period before his appointment.
Thus, F is not liable for tax which was due before his appointment.
(Directors A, C and E jointly and severally liable to pay dues of Rs. 8 lac.)