Section 89. Liability of directors of private
company.-
(1) Notwithstanding anything contained in the
Companies Act, 2013 (18 of 2013), where any tax, interest or penalty due from a
private company in respect of any supply of goods or services or both for any
period cannot be recovered, then, every person who was a director of the
private company during such period shall, jointly and severally, be liable for
the payment of such tax, interest or penalty unless he 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.
(2) Where a private company is converted into a public
company and the tax, interest or penalty in respect of any supply of goods or
services or both for any period during which such company was a private company
cannot be recovered before such conversion, then, nothing contained in
sub-section (1) shall apply to any person who was a director of such private
company in relation to any tax, interest or penalty in respect of such supply
of goods or services or both of such private company:
Provided that nothing contained in this sub-section
shall apply to any personal penalty imposed on such director.