Explain about the Central Sales Act, 1956 and its liability in special cases under Sections 16 to 18.

1. Appropriate Authority and Liability of Directors of Private Company in Liquidation of the Central Sales Tax Act, 1956

Rule:

Section 16 of the Central Sales Tax Act, 1956

Appropriate Authority

Section 18 of the Central Sales Tax Act, 1956

Liability of Directors of Private Company in Liquidation

Application:

This problem is related to the Liability in Special cases under CST are as follows;

Appropriate Authority: Section 16

Appropriate authority, in relation to a Company, means the authority competent to assess tax on the Company; 'Company' and 'Private Company' have the meanings respectively assigned to them by Clauses (i) and (iii) of Subsection (1) of Section 3 of the Companies Act, 1956.

Liability of Directors of Private Company in Liquidation:

Section 18: Notwithstanding anything contained in the Companies Act, 1956;

a) When any Private Company is wound up after the commencement of this Act, and

b) 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,

c) Every person who was a director of the private Company at any time during the period for which the tax is due

d) Director shall be jointly and severally liable for payment of such tax unless be 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.

Conclusion:

In the instant problem, the solution id dealt under;

Section 16 of the Central Sales Tax Act, 1956

Appropriate Authority

Section 18 of the Central Sales Tax Act, 1956

Liability of Directors of Private Company in Liquidation