Liability in case of company, firm or society in liquidation

83.    (1)     Every person –

(a)      who is a liquidator of any company, firm or society, which is being wound up whether under the orders of a Court or otherwise; or

(b)      who has been appointed as receiver of any assets of a company (hereinafter referred to as the “liquidator”), shall within thirty days after he has become such liquidator, give notice of his appointment as such to the Commissioner or the designated officer.

(2)       The Commissioner or the designated officer shall, after making such inquiries or calling for such information, as he may deem fit, notify the liquidator within three months from the date on which he received notice of appointment of the liquidator, the amount, which in the opinion of the Commissioner or the designated officer, 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)       Notwithstanding anything contained in the Companies Act, 1956, when any private company is wound up and any tax, interest or penalty assessed 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 the private company at any time during the period for which the tax is due, shall be jointly and severally liable for the payment of such tax, interest or penalty, unless such person  proves to the satisfaction of the Commissioner or the designated officer 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.

Explanation.–          For the purpose of this section, the expression ‘private company’ shall have the meaning, assigned to it under section 3 of the Companies Act, 1956 (1 of 1956).