Law: Civil Procedure Code, 1908

Section: O. XXI, r. 22

Income-tax-Recovery of tax-Company in voluntary liquida tion-Penalty levied for arrears of tax due by company-Proceed ings to recover penalty against personal properties of director Liability of director-Want of notice, effect of Civil Procedure Code, 1908, O. XXI, r. 22-Income-tax Act, 1961, S. 179, Second Sched., Part I, r. 2. The principle of the decisions under Order XXI, rule 22 of the Civil Procedure Code, equally apply to recovery proceedings under Part I of the Second Schedule to the Income-tax Act, 1961, as rule 2 of the latter provision is in pari materia with the former. A company passed a resolution on January 19, 1962, for going into voluntary liquidation. In November 1962, an order levying penalty for non-payment of tax due for 1959-60 and 1960-61 was passed by the Income-tax Officer who issued a certificate to the Tahsildar. Recovery proceedings by the Tahsildar were taken against the personal properties of the petitioner who was one of the directors. In the writ petition filed in the High Court by the petitioner for forbidding the attachment of his personal properties for the recovery of the penalty levied on the company: Held, (i) there being no proof that the petitioner had not been grossly regligent or had not been guilty of misfeasance or breach of duty, the liability to pay the penalty attached to the petitioner under section 179 of the Income-tax Act, 1961; and (ii) the petitioner being aware of the recovery proceedings and having participated in them cannot object to the proceedings on the ground that no notice as required under rule 2 of Part I of the Second Schedule to the Income-tax Act, 1961, had been given. JUDGMENT VEERASWAMI, J.-The petitioner, an erstwhile director of a private limited company by the name The Coonoor Talkies (Private) Limited, prays for a rule forbidding the respondents from attaching his personal properties for recovery of penalty levied on the company for non-payment of tax due for the years 1959-60 and 1960-61. On January 10, 1962, he filed a declara tion of solvency with the Registrar of Companies and on January 19, 1962, there was a resolution of the company for going into voluntary liquidation. In regard to…