Ambala Foods (P) Ltd. v. State of Haryana & Ors.

HARYANA VALUE ADDED TAX ACT, 2003

--Demand--Surety given by director of assessee-company in his individual capacity, whether enforceable against assesseeValidity ----In the absence of any specific provision in the statute, assessee-company could not be held liable for surety given by its director against VAT and CST dues of certain dealer in his individual and personal capacity. --Assessee was a private limited company. Revenue seized its bank account and took certain amount from its bank account on the allegation that the assessee had stood surety of certain dealer against which VAT and CST dues were outstanding. Case of assessee was that it had not given any such surety and its director in his personal capacity had given the surety of the said dealer. Held: Assessee-company itself did not stand surety for the said dealer nor any resolution was given by it to the revenue. In fact, one of its directors stood surety for the said firm in his individual and personal capacity for which assessee-company could not be held liable. Therefore, the amount recovered from assessee-company was directed to be refunded to it. However, revenue was at liberty to recover the amount from the person liable i.e. the said dealer or its surety.