The liquidation of a company cannot erase its criminal liability for failing to deposit tax deducted at source (TDS), nor can it shield the director responsible for the default from prosecution, a Delhi court has held.
The Additional Chief Judicial Magistrate (ACJM), Central Delhi, made the observations while sentencing M/s Naftogaz India Pvt Ltd and its director in a case involving a TDS default of more than Rs 17.68 crore for the financial year 2009-10.
In its August 19 order, the court described the failure to deposit TDS deducted from payments into the government’s account as a serious fiscal offence and imposed a fine of Rs 10 lakh on the company.
The fine is to be paid by the official liquidator from the company’s assets or…