Recovery of tax arrears from defaulters has always been a difficult area for the tax authorities. Such recovery becomes further difficult if the company/firm goes off for windup or the firm is dissolved, or the firm does not have paying capacity or the firm is not traceable, or the proprietor has died. In the cases of indirect tax, it should always be remembered that the tax amount defaulted by business entities was already collected from the ultimate consumer i.e the common public. Thus, the business entity should not be given a walkover with misappropriation of public money.
Source Taxguru
