TaxTMI 
TaxTMI 
2019 (3) TMI 310
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....n para 5, and then it is stated that the company stopped its manufacturing activities and thereafter even the petitioner ceased to be a Director of the company. Reliance is placed upon documents and records available in the office of the Registrar of Companies, State of Maharashtra, which, according to the petitioner, prove the point that the petitioner has no association with the company. 4. It is then alleged that there was an adjudication and stated to be into the matter of recovery of taxes, particularly the customs duty. 5. The fact that there were some legal proceedings became known to the petitioner only after he was confronted with a communication from the respondents. 6. He says that a demand notice dated 28-12-2018, copy of which is at ExhibitA, was served on him under which the 3rd respondent directed him to pay outstanding dues of the company, amounting to Rs. 2,49,10,040/along with interest and costs. 7. On failure to pay, it was stated that the respondents would resort to the power conferred by Section 142(1)(c)(ii) of The Customs Act, 1962 ("the Act" for short) r/w Rule 4 of The Customs (Attachment of Property of Defaulters for Recovery of Government Dues....
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....es. After a proper adjudication the amount has been crystalised. The law is very clear in that there is a liability to pay taxes and the adjudication at best determines the quantum. The dues are then crystalised in money and that is done by the adjudicatory process and which the company never questioned. Thus, the orders passed by the Competent Authorities under the Act are final and binding. The question is only of recovery. Mr. Jetly would submit that in this case it is the petitioner who was everything as far as the company is concerned. This is his company exclusively and its predominant shareholders were the petitioner and his wife. There is none other with substantial shareholding but for this couple. It is in these circumstances and when the taxes have been evaded that a show cause notice was issued way back in 1997. There was a personal hearing in the matter and the Order-in-Original is passed on 26-6-2001. That confirms the abovementioned dues. Thereafter, this Order was challenged in Appeal but it is common ground that the company throughout was represented by the petitioner. Mr. Jetly heavily relies upon the statements made in the affidavit in reply and urges that in ....
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....nnot be recovered from such person in the manner provided in clause (a) or clause (b)- (i) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business and the said Collector on receipt of such certificate shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue; or (ii) the proper officer may, on an authorisation by [Principal Commissioner of Customs] and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall ....
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.... made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section." A perusal thereof would indicate that it enables recovery of sums due to Government. Now, where any sum payable by any person would mean a sum due and payable to the Government even by an artificial person such as a company in this case. It is stated in the legal provision, that where any sum payable by the person is not paid, the proper officer may deduct or may require any other officer of Customs to deduct the amount so payable from any money owing to such person which may be under the control of the officer or such other officer of Customs. Thus, the provision enables deduction of money owing and payable by the Government to such person. That, therefore, means that appropriation and adjustment is possible as against the monies owed by the Government to such person. It is only because that person has not paid the sum payable to the Government that this power is conferred. The other way or manner of recovery is that, th....
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.... behalf. In a decision, which has been rendered by a Division Bench of this Court in Writ Petition No.4117 of 2009 [Chandrakant Bhalchandra Garware v. The Union of India & Ors.], on 5-5-2009, this Court, after relying upon its previous Judgments, held as under: "2. The respondents are seeking by communication dated 1st January, 2009 to realise from the petitioner the dues of M/s. Garware Paints Limited. 3. To make a director liable, there has to be statutory provision under which a director is made personally liable for the dues of a company. This very issue had come up for consideration before a Division Bench of this Court in Sunil Parmeshwar Mittal vs. Dy. C. (Recovery Cell), C. Ex., Mumbai-I, 2005 (188) ELT 268 (Bom.). The learned Division Bench, after considering the law in extenso, has come to conclusion that director is not liable. In the instant case, the petitioner had resigned on 1.12.1994. The bill of entry had been filed on 19.1.1994. However, no statutory provision has been shown under the Customs Act or for that matter under the provisions of Customs (Attachment of Property of Defaulters for recovery of Government Dues) Rules, 1995 making a Director liable fo....
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....on 4 of the Act provides for valuation of excisable goods for the purposes of charging of duty of excise and makes the assessee; which includes his agent liable to pay the excise duty under the Act. It would be right to say the duty is charged on goods, but the person who is liable to pay the duty is the person known as "the assessee". Clause (a) of sub Section (3) of Section 4 defines assessee exhaustively to mean the person who is liable to pay the duty of excise under the Act and includes his agent. The duty can be recovered from the person who is an assessee within the meaning of definition. Under Section 6 no person can engage in the production or manufacture of any specified goods, included in the First schedule of the Act (now the new Central Excise Tariff) except under the authority and in accordance with the terms and conditions of a licence granted under the Act. If a person produces 'excisable goods' within the meaning of that expression, he has got to obtain a licence under Section 6 of the Act. 24. Examination of the above provisions would unequivocally go to show that none of the provisions makes the former director personally liable to pay excise duty. The....
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....l and conclusive. The Supreme Court has explained the concept of res judicata in the case of Sulochana Amma v. Narayanan Nair [1995 (77) E.L.T. 785 (S.C.)]. The principle operates as a bar to try the same issue once over. It aims to prevent multiplicity of proceedings and accords finality to an issue, which directly and substantially had arisen in the former suit between the same parties or their privies, decided and became final, so that parties are not vexed twice over; vexatious litigation is put an end to and the valuable time of the Court is saved. It is based on public policy as well as private justice. The principle would very much apply, to all judicial proceedings whether civil or otherwise. It equally applies to quasijudicial proceedings of the Tribunals other than the Civil Courts. In this view of the matter, the respondents cannot set up any demand against Mr. S.P. Mittal based on the order dated 22-6-2000 passed against the company M/ s. GTL. The reasons recorded by the CEGAT while rejecting appeal filed by Mr. S.P. Mittal holds good even in the case of Mr. K.T. Shah." 21. This Judgment only follows what has been held earlier and subsequently. 22. The reliance on....