GST India Forum – Goods and Services Tax (GST) in India › Forums › Bare Law › Sec 88 – Liability in case of company in liquidation
- Adarsh MadrechaModeratorApril 13, 2017 at 11:48 PMPost count: 57Topics: 36
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(1) When any company is being wound up whether under the orders of a court or Tribunal or otherwise, every person appointed as receiver of any assets of a company (hereafter in this section referred to as the “liquidator”), shall, within thirty days after his appointment, give intimation of his appointment to the Commissioner.
(2) The Commissioner shall, after making such inquiry or calling for such information as he may deem fit, notify the liquidator within three months from the date on which he receives intimation of the appointment of the liquidator, the amount which in the opinion of the Commissioner would be sufficient to provide for any tax, interest or penalty which is then, or is likely thereafter to become, payable by the company.
(3) When any private company is wound up and any tax, interest or penalty determined under this Act on the company 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 such company at any time during the period for which the tax was due shall, jointly and severally, be liable for the payment of such tax, interest or penalty, unless he proves to the satisfaction of the Commissioner that such 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.Priya MadrechaModeratorMay 23, 2017 at 1:05 PMPost count: 280Topics: 4
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This section deals with the tax and other dues of a company in case it is wound up or liquidated.
(i) Every person appointed as receiver / liquidator needs to give intimation of his appointment to the Commissioner within 30 days of his appointment.
(ii) Within 3 months from the date of such intimation, the Commissioner will notify the liquidator to set apart a sum of money that would be sufficient to discharge, in his opinion, the amount of tax, interest and penalty payable by the company after making necessary enquiry or calling of information.
(iii) When a private company is not able to clear its dues, then every person who was the Director at any time during the period, for which tax is due, would be liable jointly and severally to pay the dues.
(iv) However, if any Director proves to the satisfaction of the Commissioner that such nonrecovery is not due to his gross neglect, misfeasance or breach of duty, the liability would not arise in the hands of such Director.
Q1. Intimation regarding appointment of liquidator should be given to the Commissioner within 30 days of
(b) Cancellation of registration
(c) Appointment of Liquidator
(d) Order of Court
Ans: (c) Appointment of Liquidator
Q2. Commissioner will notify the amount of liability within how many days of intimation
(a) 3 months
(b) 30 days
(c) 60 days
(d) 6 months
Ans: (a) 3 months
Q3. When would a Director not be liable to pay the tax dues, if the company is not able to pay
(a) Liquidator refuses to pay
(b) Auditor refuses to pay
(c) If the non-recovery is not due to gross neglect of the Director
(d) None of the above
Ans: c) If the non-recovery is not due to gross neglect of the Director
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