Sale deed liability and delay objections failed, leaving customs recovery proceedings intact against the purchaser.

A purchaser who accepted a sale deed expressly allocating responsibility for all outstanding taxes, duties and other liabilities in respect of the transferred immovable properties and plant and machinery was treated as bound by that clause for past customs dues, so the property could not be insulated from customs recovery. The court also rejected the delay and laches objection because the department had earlier raised objections before the Tribunal and had sought to participate in the recovery proceedings; the challenge therefore could not defeat public dues on that ground. The departmental action was upheld and the customs recovery proceedings were left intact.

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Issues: (i) whether the purchaser was bound by the sale deed to discharge the outstanding customs and other prior liabilities of the erstwhile owner and could therefore resist detention of the property, and (ii) whether the departmental action was vitiated by delay or laches.

Issue (i): whether the purchaser was bound by the sale deed to discharge the outstanding customs and other prior liabilities of the erstwhile owner and could therefore resist detention of the property.

Analysis: The sale deed expressly provided that the purchaser would be liable to pay all outstanding taxes, duties and other liabilities in respect of the immovable properties and plant and machinery. The Court read this clause as covering past dues and not merely future liabilities. The transaction was also viewed with caution because the property was sold privately, after attachment, and there was substantial commonality between the persons connected with the two companies. In that setting, the purchaser could not avoid responsibility for the customs department's claim.

Conclusion: The issue was decided against the petitioner and in favour of the Revenue.

Issue (ii): whether the departmental action was vitiated by delay or laches.

Analysis: The department had earlier raised objections before the Tribunal and had also attempted to participate in the recovery proceedings. Its objections were not ignored in a manner that could defeat the public dues. On the facts, the challenge could not be sustained on the ground of delay.

Conclusion: The issue was decided against the petitioner and in favour of the Revenue.

Final Conclusion: The petition failed and the impugned departmental action was upheld, leaving the customs recovery proceedings intact.

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