1990 (10) TMI 83 - HC - Central Excise

Court quashes proceedings against accused No. 5 under Section 9AA - Lack of liability and abuse of process

PMD THACKERSEY Versus ASSISTANT COLLECTOR OF C. EX.

The court quashed the proceedings against accused No. 5, finding that he could not be held liable under Section 9AA of the Central Excises and Salt Act. ... Prosecution Issues:Challenge to the issue of process dated 11th March, 1986 on a complaint filed under Central Excise Act against accused No. 5. Interpretation of Sections 9, 9AA, and 9A of the Central Excises and Salt Act, 1944. Allegations against accused No. 5 regarding excise duty evasion in a company. Liability of a director under Section 9AA of the Act. Retroactive application of Section 9AA. Abuse of process of the court in continuing the prosecution against accused No. 5.Analysis:The judgment concerns a petition by accused No. 5 challenging the process issued against him in a complaint filed under the Central Excise Act. The complaint alleged excise duty evasion by a company in 1979, leading to adjudication proceedings in 1985. Accused No. 5 argued that the complaint lacked material against him and that he ceased to be a director of the company in 1981, thus should be exonerated.The court examined the provisions of Section 9 and Section 9AA of the Act. Section 9AA, introduced in 1985, holds individuals in charge of a company liable for offenses committed by the company. The court noted that the complaint did not establish accused No. 5's responsibility for the company's affairs, as required by Section 9AA(1), thereby not attracting liability under this provision.Regarding Section 9AA(2), which pertains to offenses committed with the consent or neglect of directors, the court emphasized the necessity of specific allegations and proof. Since the complaint lacked such allegations against accused No. 5, the court found this section inapplicable to him.The court acknowledged accused No. 5's cessation as a director in 1981 and highlighted the absence of a counter to this fact. It deemed retroactive application of Section 9AA impermissible, as it would render a person not criminally liable at the time of the offense liable, contravening standard interpretative principles.In conclusion, the court held that continuing the prosecution against accused No. 5 would constitute an abuse of the court process. Citing precedent and legal authorities, the court quashed the proceedings against accused No. 5, considering his lack of involvement in the company's affairs post-1981 and the absence of specific allegations against him in the complaint.