AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 802
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....ioner was a director in the company "Shri Ram Casting P. Ltd" (hereafter "the company"), and she resigned from the Board of the company on 2.4.1993. The petitioner was the owner of 3 properties viz. (i) Pitam Pura property, (ii) Wazirpur property and (iii) Mukherjee Nagar property. She first received the impugned notice dated 3.8.2012 (addressed to the company, copy sent to her) wherein she was informed that government dues under the Customs Act, 1962 (hereafter "the Act") amounting to Rs. 74,78,225/- along with interest were to be recovered from the company, and that if the amount was not paid within prescribed period, steps would be taken in accordance with the provisions of the Customs (Attachment of Property Defaulters for the Recovery ....
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....y. It was also submitted that in the absence of any provision enabling recovery of the amounts due from a customs duty defaulter, from a third party, and in the absence of any proper proceeding putting such third party to notice about the proposed adverse order, and fair opportunity to respond to it, the recovery of such amounts is illegal and without authority of law. 4. Counsel for the Customs authorities did not dispute that the Petitioner is owner of the properties, and that the tax defaulter in this case was the company. However, it was argued that as director, the petitioner could not distance herself from the company's acts and omissions; she had to shoulder its liabilities. It was in furtherance of such obligation that the authorit....
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....rnment under section 28B is not paid, transfers or otherwise disposes of his business or trade in whole or in part, or effects any change in the ownership thereof, in consequence of which he is succeeded in such business or trade by any other person, all goods, materials, preparations, plants, machineries, vessels, utensils, implements and articles in the custody or possession of the person so succeeding may also be attached and sold by the proper officer, after obtaining written approval from the Commissioner of Customs, for the purposes of recovering the amount so payable by such predecessor at the time of such transfer or otherwise disposal or change." The Relevant Rules: "Rule 2: (ii) 'Government dues' means any duty or drawback to ....
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....he amount mentioned in the Certificate together with the cost of detention is paid by the defaulter." 6. The above provisions make it clear beyond doubt that it is only the defaulter against whom steps may be taken under Rules. The defaulter is the person from whom dues are recoverable under the Act, which in the present case undoubtedly is the company. There is no averment that the company has been or is being wound up. In that case, there cannot be any question about the separate juristic personality of an existing company and its former director; the dues recoverable from the former cannot, in the absence of a statutory provision, be recovered from the latter. There is no provision in the Customs Act, 1962 corresponding to Section 179 o....
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.... end the discussion, the decision of the Kerala High Court, in Nishad Patel & Anr. Vs. State of Kerala & Ors. (1999) 96 Comp Case 861 (Ker) requires to be noticed. In that case, it was held that: "In the present case what respondents Nos. 3 to 5 seek to recover is arrears of sales tax allegedly due from Alliance Leathers (P.) Ltd. The petitioners are only the directors of the said company as already noted. They have in their possession no assets of the company whatsoever. As such, they have no personal liability in respect of the dues allegedly due from the company. It is by now well-settled that a director of a company cannot be proceeded against for recovery of arrears of any amount due from the company as already noticed. Therefore, the....