Ex-director declared personally responsible for VAT penalties

A judge ruled yesterday that a former director of the bankrupt supermarket chain Price Club should be held personally responsible and must pay the VAT Department almost €760,000 in penalties and interest incurred by the company.

The ex-director, Victor Zammit, instituted the case himself after the VAT Department initiated action against him in his personal capacity. He insisted he had only became aware of the department's claim when the company was served with a notice by the department in March 2005.

The money was owed for the period between August 2000 and July 2001. The company had appealed against the assessment to the VAT Appeals Board, which, in June 2004, decided against the company. Mr Zammit insisted that the claim should be made to the liquidator, appointed to wind up the company, and not to him personally.

However, Mr Justice Raymond C. Pace pointed out yesterday that the Price Club directors had been found guilty of wrongful and fraudulent trading for they had intended to defraud the creditors.

The demand notice had been issued in terms of law and had been addressed to Mr Zammit personally because he was a director of Price Club at the time the VAT assessment was conducted. The fact that the supermarket chain was being wound down did not change Mr Zammit's personal responsibility. Neither could Mr Zammit plead that he had acted in good faith when he was a company director.

The court therefore dismissed his action.