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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the appellant could be held liable for contravention of section 18(2) of the Foreign Exchange Regulation Act, 1973 on the basis of the deeming provision in section 68, in the absence of any specific material showing that she was in charge of and responsible for the conduct of the company's business at the relevant time.
Analysis: Section 68 creates a rebuttable deeming fiction, but liability of a director cannot be fastened merely because of the designation held in the company. The memorandum and the adjudication order contained only general, identical averments against all directors and did not contain any specific attribution of the appellant's role in the day-to-day affairs of the company. The appellate order also did not discuss facts peculiar to her. In the absence of evidence showing that she was responsible for the conduct of the company's business, the statutory presumption was not established against her.
Conclusion: The appellant could not be held liable for the alleged contravention, and the orders against her were unsustainable.
Ratio Decidendi: Vicarious liability of a director under a deeming provision cannot be sustained without a specific averment and supporting material showing that the person was in charge of and responsible for the conduct of the company's business at the relevant time.
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