Customs Act, 1962 — Section 142 — Government/Tax dues against company –

June 24th, 2013

Customs Act, 1962 — Section 142 — Government/Tax dues against company — Liability of separate juristic personality for — Petitioner was a director in the company and had resigned from the Board of the company — Petitioner was owner of properties — Petitioner received the impugned notice (addressed to the company, copy sent to her) wherein she was informed that government dues under the Customs Act, 1962 along with interest were to be recovered from the company, and that if the amount was not paid within prescribed period, steps would be taken in accordance with the provisions of the Customs (Attachment of Property Defaulters for the Recovery of Government Dues) Rules 1995 — Subsequently, proceedings for recovery of government dues pending against the property initiated and petitioner was not allowed to be transferred/disposed of the same — Held, it is only the defaulter against whom steps may be taken under Rules — Defaulter is the person from whom dues are recoverable under the Act, which in the present case undoubtedly is the company — There is no averment that the company has been or is being wound up — In that case, there cannot be any question about the separate juristic personality of an existing company and its former director; the dues recoverable from the former cannot, in the absence of a statutory provision, be recovered from the later — Impugned notices and action of the Customs authorities is at once in utter violation of Article 265 of the Constitution, as it seeks to recover tax dues of one from another, without authority of law — It also amounts to illegal deprivation of the petitioner’s property, without authority of law, under Article 300-A of the Constitution of India — Consequently, impugned notices are quashed — Writ Petition is allowed — Constitution of India — Articles 265 & 300-A — Recovery of tax dues of one from another, Effect — Companies Act, 1956 — Company incorporated under — Status of it’s directors.

Union of India v. M.D. Lotlikar [1988] 172 ITR1 (Bom), G.C. Malhotra v. Deputy Collector (1998) 110 STC 406 (All), Mukesh Gupta v. State of Haryana (1996) 8 PHT 326 (P&H), Suneet Khurana v. Assistant Collector (1997) 10 PHT 495 (P&H), Om Prakash Walecha v. State of Haryana, 2009 (238) ELT 0215 (P & H), A.P. Raheja and Another v. State of Hrayana And Others (2010) 29 VST 103 (P&H) & Nishad Patel & Anr. Vs. State of Kerala & Ors. (1999) 96 Comp Case 861 (Ker), Referred.

(Para 6 & 9)

Anita Grover v. Commissioner of Central Excise[DB], WP (C) No. 5894/2012(03/12/2012), 2013(288) ELT 63: 2013(196) DLT 598 [S. Ravindra Bhat, J.: R.V. Easwar, J.]

Entry Filed under: Commercial Laws