Document Fragment View

Matching Fragments

17. Mr. Harpreet Singh repeatedly and vehemently emphasised that the Directors of a company and other persons in management are vicariously liable to pay/deposit service tax. In support of his submission, he relied upon Section 9AA of the Central Excise Act, 1944 [as made applicable to like matters of service tax under Section 83 of Finance Act], Section 89 of the current CGST Act and Section 168(2) of the Companies Act, 2013 which stipulate that a Director who has resigned shall be liable, even after his resignation, for the offences committed by the company during his tenure. Thus, according to him, the penal / statutory liability is deemed to have been imposed by a statute upon the petitioner in this case under Section 87 of Finance Act in line with Section 9AA of Central Excise Act, 1944 and proviso to sub-section (2) of Section 168 of the Companies Act, 2013.

SECTION 9AA OF THE CENTRAL EXCISE ACT, 1944 AND SECTION 168(2) OF THE COMPANIES ACT, 2013 DEAL WITH OFFENCES COMMITTED BY A COMPANY, WHICH IS DISTINCT FROM CIVIL LIABILITY TO PAY TAX

28. The reliance upon Section 9AA of the Central Excise Act, 1944 and Section 168(2) of the Companies Act, 2013 is untenable in law as these provisions deal with offences committed by a company, which is distinct from civil liability to pay tax.

THE IMPUGNED ORDER IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE