TaxTMI 
TaxTMI 
2022 (7) TMI 667
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...., 23.09.2008 and 15/30.09.2008, all passed by respondent No. 2 by which penalty has been imposed on one TPI India Ltd, its directors and ex-directors. Petitioner is impugning these orders because Mr. Bhatt's name also appears in the impugned orders. 4. It is stated in the petition that prior to 10.03.1999, Mr. Bhatt was an independent non-executive director of TPI India Ltd ("TPI"). On 10.03.1999, Mr. Bhatt resigned as independent director of TPI. A copy of resignation letter dated 10.03.1999 and Form 32 dated 29.04.1999 were filed with the Registrar of Companies by TPI intimating to the public about resignation of Mr. Bhatt. TPI has been declared a sick industrial company under the provisions of the Sick Industrial Companies (Special Provisions Act), 1955 ("SICA") by the Board of Industrial and Financial Reconstruction ("BIFR"), New Delhi. The fact that Mr. Bhatt had resigned has not been disputed. The fact that Mr. Bhatt was an independent non-executive director and had nothing to do with the day to day management and business of TPI has also not been denied. 5. It appears that TPI had been issued Advance Import licences under which TPI was permitted to import certain raw m....
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....most identical except that after the first order, in the subsequent orders, there is reference to BIFR proceedings. It will be useful to reproduce the first adjudication order dated 25.07.2008 which reads as under:- 10. From the order, it is quite clear that (a) It was TPI that was required to fulfill the export obligation within the prescribed period and submit the documents within one month from the date of expiry of export obligation period towards discharge of its export obligation; (b) It was TPI that did not submit any original documentary evidence in discharge of export obligation; (c) In view thereof, it was TPI that had received a demand notice dated 13.08.2000; (d) It was TPI that was given an opportunity of personal hearing by the licencing authority; (e) It was TPI that failed to respond to the demand notice; (f) The licencing authority therefore declared TPI a defaulter; (g) Since TPI did not submit any original documents in reply to the demand notice, it was TPI that was issued a refusal order dated 26.02.2001 followed by a forfeiture order dated 19.06.2003; (h) It was TPI that had received a show-cause-notice dated17.06.2008 requiring to show cause a....
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.... issued in the name of Mr. Bhatt or even to his correct address. Even show-cause-notice issued to TPI did not contain specific allegation against Mr. Bhatt to which he could reply. No opportunity as such was given to Mr. Bhatt to represent against the proposed imposition of penalty. Obviously, Mr. Bhatt was not heard before the impugned orders were passed whereby penalty has been imposed upon him. The proceedings against Mr. Bhat were void ab initio. If only a notice had been sent to Mr. Bhatt identifying the specific acts attributable to him, Mr. Bhatt could have represented against the imposition of any penalty. He could have placed on record various facts and circumstances to show that even if any offence was committed by TPI, he had no hand in it. All these circumstances, if he were able to establish them, would have absolved him of the liability of penalty. Even on the question of prejudice, the impugned order imposing the penalty on Mr. Bhatt could not be sustained. It would be useful to quote paragraphs 7 to 9 of a judgment of Gujarat High Court, where facts were almost similar. In the case of Om Vir Singh Vs. Union of India 2016 (340) E.L.T. 277 (Guj.) they are as under:- ....
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.... therefore, the factum of the company not informing the petitioner cannot be construed as a parallel situation to the one before the Supreme Court in the aforesaid decision. In the present case what is of utmost importance is the fact that no notice to the petitioner was issued by the respondents. That being the case, there was a clear violation of the mandatory statutory provision contained in Section 4L of the said Act. That apart, there was a violation of the principles of Natural justice. 18. Before parting with this case, it would be relevant to note that though the aforesaid discussion has proceeded on the assumption that no prejudice has been caused to the petitioner, in point of fact prejudice has actually been caused to the petitioner. This is so because the show-cause notice was not issued to the petitioner. Even the show-cause notice issued to the company did not contain specific allegations against the petitioner to which he could reply. No opportunity as such was given to the petitioner to represent against the proposed imposition of penalty. Obviously, the petitioner was not heard before the order-in-original was passed whereby the aforesaid penalty was imposed upon ....