The Madras High Court held that Company is cannot be held liable for the dues of the proprietorship concern or director’s service tax liability.
The Court was hearing a petition filed by M/s. Acharya Engineering Pvt. Limited to refrain from taking any coercive recovery proceedings against their company for recovery of the dues.
The petitioner company was the proprietor of M/s. Acharya Enterprises, which was engaged in the business of providing erection, commissioning and installations services and they are registered with the Service Tax Department from 10.07.2007. During verification by the officers of the second respondent, it was noticed from the returns filed by M/s. Acharya Enterprises that they had provided taxable services to some companies.
M/s.Acharya Enterprises has filed an appeal against the order dated 25.02.2014. In the meanwhile, the respondent has issued a notice to the 5 th respondent attaching the bank account of the petitioner company. The bank account of the petitioner company was attached on the ground that another entity has not paid the service tax as demanded in the order dated 25.02.2014.
Justice M.Duraisamy held that “the petitioner company is a separate and independent entity, the bank account of the petitioner company cannot be attached for the dues of the proprietorship concern, viz., M/s.Acharya Enterprises”.
“The bank account of the petitioner company, which was attached by the respondents 1 to 3, is liable to be raised. Accordingly, the attachment in respect of the petitioner company stands raised”, the bench observed.
Read the full text of the Judgment below.
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