2026-VIL-210-BOM
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VAT High Court Cases

Maharashtra Value Added Tax Act, 2002 - Vicarious Liability on Director under Section 75 of the Maharashtra VAT Act, 2002 - The applicant was charged along with other co-accused for offences under Sections 406, 409, 420, 467, 468, and 471 read with 34 of the IPC and under Section 74(1)(b)(c)(e) of the MVAT Act on the allegations that the applicant and other co-accused had submitted false and fabricated information by giving false declaration in Form-F to the Sales Tax Department and thereby defrauded the Government exchequer - Whether the vicarious liability under Section 75 of the MVAT Act, 2002 can be attributed to the applicant merely because she is a Director of the company - HELD - The Section 75(1) of the Act states that every person who at the time the offence is committed, was incharge of and was responsible to the business entity for the conduct of the business as well as the business entity shall be deemed to be guilty of the offence. However, a Director may be vicariously liable only if the company itself is liable in the first place and if such Director personally acted in a manner that directly connects their conduct to the company's liability - Mere authorization of an act at the behest of the company or the exercise of a supervisory role over certain actions or activities of the company is not enough to render a Director vicariously liable. There must exist something to show that such actions of the Director stemmed from their personal involvement and arose from actions or conduct falling outside the scope of its routine corporate duties - In the present case, the prosecution failed to make any specific allegations against the applicant that she was incharge of and looking after the day-to-day business of the company. In absence of any such material, the vicarious liability cannot be imputed automatically on the applicant merely because she was a Director of the company. Therefore, the proceedings against the applicant is quashed and the criminal application is allowed
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