K. Rama Prasad vs. State Of Andrha Pradesh
Original PDF →No AI summary yet for this judgment.
oAPHC010632742010
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Juri iction) [3529] MONDAY, THE THIRTIETH DAY OF MARCH TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION NO: 8991/2010 Between:
K. RAMA PRASAD, S/O. SATYANARAYANA BUSINESS R/O. INDUSTRIAL ESTATE,PLOT NO.B-1, SATRAMPADU,ELURU,WEST GODAVARI DIST
...PETITIONER AND 1. STATE OF ANDRHA PRADESH, REP. BY THE SECRETARY COMMERCIAL TAXES DEPARTMENT, A.P SECRETARIAT,HYDERABAD
THE COMMERCIAL TAX OFFICER, ELURU, WEST GODAVARI DIST
...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toto issue an appropriate writ order or direction more particularly one in the nature of Writ of Mandamus declaring the Endorsement vide Ref.A8/310/2006 dt. 30.12.2009 passed by the 2nd respondent as illegal, arbitrary, null and void and contrary to the provisions of Section 16B of A.P. General Sales Tax act, 1957 and to set aside the same IA NO: 1 OF 2010(WPMP 11615 OF 2010 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to
2 RRR, J & TCDS, J W.P.No.8991 of 2010
stay all further proceedings in pursuance of the Endorsement in Ref.A8/310/2006 dt. 30.12.2009 passed by the 2nd respondent, pending disposal of the above writ petition IA NO: 2 OF 2010(WPMP 12155 OF 2010 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to implead the 3rd respondent herein as the 3rd respondent in WP No. 8991 of 2010 & WPMP and the other petitions connected thereto and pass Counsel for the Petitioner:
VENKATESWARA RAO GUDAPATI Counsel for the Respondent(S):
GP FOR COMMERCIAL TAX
3 RRR, J & TCDS, J W.P.No.8991 of 2010
The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao)
Heard Sri Venkateswara Rao Gudapati, learned counsel for the petitioner and the learned Government Pleader for Commercial Taxes appearing for the respondents.
The petitioner herein was a Director in a Private Limited Company. The tax liability of the Company for the assessment year 1998-99, under the A.P. General Sales Tax Act, 1957, came to be demanded by virtue of the orders of the Sales Tax Appellate Tribunal, dated 30.07.2009, in T.A.No.456 of 2007. By virtue of the said order, the Commercial Tax Officer, Eluru, had issued a notice, dated 26.08.2009, to the petitioner herein, contending that an amount of Rs.2,44,786/- had become due from the company, for the year 1999-2000 and also referred to the order of the Sales Tax Appellate Tribunal, dated 30.07.2009, in T.A.No.456 of 2007, regarding the assessment year 1998-99. The Commercial Tax Officer, thereafter, issued an endorsement, dated 30.12.2009, to the petitioner, calling upon the petitioner to pay an amount of Rs.2,44,786/-, for the assessment year 1999- 2000 and an amount of Rs.2,30,212/-, for the assessment year 1998-99, aggregating to an amount of Rs.4,74,998/-. This endorsement was issued under Section 16-B of the A.P. GST Act, 1957, r/w Section 24 (5) of the A.P. VAT Act, 2005. The said endorsement of the Commercial Tax Officer stated that the petitioner had become liable for payment of the aforesaid amount, as
4 RRR, J & TCDS, J W.P.No.8991 of 2010
he was the Director of the Private Limited Company and was liable to make such payment.
The petitioner, being aggrieved by the said endorsement, has approached this Court by way of the present Writ Petition, contending that the Private Limited Company is still in existence and has not been wound up. He would also state that his business activity in relation to his proprietary concern is also being affected by the coercive process initiated by the Commercial Tax Officer.
The learned counsel for the petitioner would contend that the petitioner had resigned as a Director of the said Company in the year 2002 and that the said Company is still in existence and consequently, the provisions of Section 16-B of the A.P. GST Act, 1957 would not be applicable. The learned counsel, in the course of arguments, had stated that the dues claimed by the Tax Authorities, had been cleared by the Company and as such the Writ Petition can be disposed of on that ground also.
The learned Government Pleader for Commercial Taxes, after obtaining instructions, submits that an amount of Rs.2,64,280/- is still due from the Company. It appears that the Company is still in existence and has not been wound up.
Section 16-B of the A.P. GST Act, 1957 reads as follows:
5 RRR, J & TCDS, J W.P.No.8991 of 2010
“16-B. Liability of directors of private company in liquidation:- -- When any private company is wound up and any tax assessed on the company under this Act for any period, whether before or in the course of or after its liquidation, cannot be recovered, then every person who was a director of the private company at any time during the period for which the tax is due, shall be jointly and severally liable for the payment of such tax, 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.”
It is apparent from the language of Section 16-B that personal liability as a Director of a Private Limited Company would arise subject to the conditions set out in the provision, only if the said person was a Director of the Private Limited Company and such a Private Limited Company has been wound up or liquidated. As such a situation does not exist in the present case, the provision of Section 16-B of the A.P. GST Act would not be available and consequently, the proceedings, initiated by the Commercial Tax Officer, are without juri iction.
Accordingly, this Writ Petition is allowed, setting aside the endorsement, dated 30.12.2009. It would, however, be open to the
6 RRR, J & TCDS, J W.P.No.8991 of 2010
respondent authorities to recover the tax dues from the Company itself, subject to the provisions of law. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed.
________________________ R. RAGHUNANDAN RAO, J
________________ T.C.D. SEKHAR, J
Date:30.03.2026 MJA
7 RRR, J & TCDS, J W.P.No.8991 of 2010
201
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR
WRIT PETITION NO: 8991/2010 (per Hon’ble Sri Justice R. Raghunandan Rao)
2026
MJA
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.