Successor liability for pre-existing customs dues upheld where business continuity and asset transfer showed a genuine business succession.

A successor business entity remained liable for pre-existing customs and excise dues where the proprietorship concern had continued in substance as a partnership firm, with business continuity and transfer of assets showing succession. The Court held that change in the form of business did not extinguish the statutory liability, and the recovery provision could be applied because it was already in force when proceedings began. Reliance on authorities concerning dissolved firms was distinguished, and the earlier challenge having attained finality reinforced enforcement. The demand and proposed attachment were therefore sustained, and the writ petition was rejected.

---

---

Issues: Whether the demand and proposed attachment for customs and excise dues of the erstwhile proprietorship concern could be enforced against the subsequently formed partnership firm, and whether the statutory provision enabling recovery from a successor could be invoked in the facts of the case.

Analysis: The statutory liability incurred by the proprietorship concern did not cease merely because of a change in the manner of carrying on business. The materials showed continuity in the business and transfer of assets, with the proprietorship concern later converted into a partnership concern. The Court distinguished the authorities relied upon by the petitioner on the ground that the present case did not involve an assessment against a dissolved firm and that the recovery provision in question had already come into force when the proceedings were initiated. The earlier challenge had also not been pursued, and the original order had attained finality. In such circumstances, the successor firm could not avoid the existing liability.

Conclusion: The demand and recovery action were held to be valid, and the writ petition was rejected.

Final Conclusion: The recovery proceedings against the successor business entity were sustained, and no interference was called for with the impugned notice of demand.

Ratio Decidendi: A successor business entity cannot avoid recovery of a pre-existing statutory dues liability where the business continuity and vesting of assets establish succession, and the recovery provision is already in force when proceedings are initiated.

---