In the latest in a string of revelations about his businesses which have embarrassed party bosses and colleagues, HMRC has presented a petition to the courts to wind up Bellhill Limited, one of a raft of companies owned by Glasgow councillor Sohan Singh.
Bellhill is the vehicle for Mr Singh's Lorne Hotel in Glasgow's west end. It has previously been targeted by police over alcohol licensing breaches and claims of hampering criminal enquiries, leading to Mr Singh's own local authority issuing him with a written warning.
A notice in the Edinburgh Gazette, an official publication of the UK Government which includes insolvency and bankruptcy announcements, said HMRC was calling on the court to appoint a liquidator to the company.
The 60-year-old is listed as the sole director of Bellhill.
Mr Singh was recently suspended by the Labour Party after police moved on another of his Glasgow hotels, Artto, when it came to light it had been selling alcohol without a licence for over a year.
The Lorne Hotel has also been the subject of speculation among Mr Singh's estranged political colleagues after it emerged its electricity was being provided, at least partly, by a mobile generator parked outside the Sauchiehall Street venue.
In little over a year in frontline politics Mr Singh, who represents the north-east of Glasgow, has been affected by constant revelations.
It emerged he had operated unlawfully as a landlord in flats bought for £1 from the council, he was temporarily suspended by the council's Labour administration for admitting to parking in a disabled bay while on council businesses and he quit the ceremonial post of bailie for the council.
He also racked up debts to the city council's marketing bureau and was accused by a Scottish Government minister of being responsible for the closure of a Perthshire bank because of the state of the adjoining property which he owns.
One source said: "This really does make it easier for Labour to keep Sohan out and close all doors to a return. It may not be the defining thing but as he continues to embarrass people he's just hammering nails into his own coffin.
"I can only begin to speculate how much he owes HMRC but it must be a considerable wedge if they're seeking to liquidate. The generator outside the Lorne has been a topic of conversation for some time now."
Glasgow SNP group leader Graeme Hendry said: "Cllr Singh's track record is simply awful and an almost daily embarrassment to his political masters. I hope those controlling Glasgow Labour bring this rather sad episode to an end soon for all our sakes."
It is also the second time the Lorne has been in trouble with HMRC. It emerged last year Mr Singh had been employing the man from whom he had bought the hotel for around £7.5 million, who had his assets frozen after the deal.
Archie Sharif sold the hotel to Mr Singh at a loss of about £4m in 2011 but was apprehended by HMRC after he attempted to move money to a bank in Pakistan from the sale.
Just before the sale to Mr Singh, HMRC petitioned to wind up Sharif's trading company Lorne Hotel Glasgow Ltd and a liquidator was appointed.
HMRC said that while the figures owed to it would be publicly available when the matter came to court it could not comment on individual cases and reveal the extent of the debt.
Mr Singh told The Herald he had no comment.