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In the opinion of this court, reliance placed upon section 89 of the Act is thoroughly misconceived inasmuch the same relates to recovery of any tax, interest or penalty due from a private company in respect of supply of goods or services. Moreover, even if such amount cannot be recovered from the private company, the directors of the company do notipso factobecome liable to pay such amount and it is only if the director fails to prove that nonrecovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company,

Shanti Prime Publication Pvt. Ltd.

Section 83 of the CGST Act, 2017—Attachment of Bank Accounts-- The Petitioner submitted that the Respondent has attached the bank accounts of the directors of his company. Provisions of section 83 of the Act states that the same empowers the Commissioner, if the circumstances therein are satisfied, to attach provisionally any property, including bank account, belonging to the taxable person. The petitioner-company is registered under the provisions of the Act and is, therefore, the taxable person. Under the circumstances, the provisions of section 83 of the Act could have been invoked against the petitioner, however, under no circumstances, the same could have been invoked against the directors of the petitioner-company. The Respondent placed reliance on the provisions of section 89 of the Act, which permits recovery of the dues of the private company from its directors, in case such amount cannot be recovered from the company.

Held that:-The Hon’ble High Court observed that reliance placed upon section 89 of the Act is thoroughly misconceived inasmuch the same relates to recovery of any tax, interest or penalty due from a private company. Moreover, even if such amount cannot be recovered from the private company, the directors of the company do not ipso facto become liable to pay such amount and it is only if the director fails to prove that 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, that the same can be invoked. The Hon’ble Court held that the impugned orders of attachment, to the extent the same attach the bank accounts of the directors, are totally without any authority of law and directed the respondents to release the attachment of the bank accounts. — H.M. Industrial Pvt. Ltd Vs. The Commissioner, CGST And Central Excise [2019] 9 TAXLOK.COM 010 (Ker)