Personal liability of directors for company customs dues requires express statutory authority; recovery demand was quashed.

A director cannot be fastened with personal liability for a company's customs dues unless the governing statute expressly creates that liability. The Bombay High Court found no provision in the Customs Act or the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 imposing such liability on a director, and followed the earlier Division Bench view on the same principle. The recovery demand against the petitioner was therefore unsustainable, and the communication seeking recovery was quashed.

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Issues: Whether a director could be made personally liable for the customs dues of a company in the absence of an express statutory provision.

Analysis: Personal liability of a director for company dues can arise only when the governing statute or clearly creates such liability. The Court found no provision under the Customs Act or the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 making a director liable for the dues of the company. It also followed the earlier Division Bench view that a director is not liable in the absence of statutory authority.

Conclusion: The demand against the petitioner could not be sustained and the issue was decided in favour of the petitioner.

Final Conclusion: The communication seeking recovery from the petitioner was quashed and the rule was made absolute.

Ratio Decidendi: A director cannot be fastened with personal liability for company dues unless the relevant statute expressly creates such liability.

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