Jurisprudentiol - Thursday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Customs

Recovery from defaulters - Former Director's properties cannot be attached for recovering dues from Company: HC

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 of the Income Tax Act, 1961 or Section 18 of the Central Sales Tax, 1956 which enable the revenue authorities to proceed against directors of companies or such like third parties who are not defaulters.

Income Tax

Whether when assessee is public limited company and also attracts provisions of Sec 179 because of complex nature of case, it is fit case for AO to invoke principle of lifting of corporate veil - YES: HC

THE petitioner is a director of a private limited company ("the company"). On 7.1.1999 there were search proceedings on the company u/s 132 of the Act. Pursuant to such operations, block assessment u/s 158BC of the Act was framed on 23.3.2001 computing total income of the company at Rs. 259,22,64,020/-. The company preferred an appeal before the Commissioner (Appeals) who by his order dated 18.9.2002 reduced the computation of total income to Rs. 130,54,95,443/-. On the ground that the tax could not be recovered from the company, the respondents initiated proceedings u/s 179 of the Act against the petitioner. In response to notice issued by the respondent, the petitioner opposed any recovery from him on the ground that the said company was a public limited company duly incorporated under the Companies Act, 1956. Provisions of section 179 of the Act would be applicable only where tax is due from a private company and, therefore, no recovery against the petitioner u/s 179 of the Act can be made for dues of the said company.

Central Excise

Order Passed by Commissioner while application was pending before Settlement Commission is non est : HC

SETTLEMENT Commission was entitled to pass final orders not only in relation to matters covered by the application for settlement but also any other matter relating to the "case" not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub section (1) or sub section (6). The matter relating to the lack of jurisdiction of the Settlement Commission was specifically raised by the Commissioner of Central Excise in his report dated 13-09-2004 submitted to the Settlement Commission under clause (1) of Section 32F and the said issue has been decided by the Settlement Commission in its order of admission dated 31-05- 2005. Therefore its finding that the order of the Commissioner of Central Excise dated 30-07-2004 is non est in law is a finding given by it in exercise of jurisdiction conferred on it under Section 32F (7). Therefore, it cannot be said that the said finding given by the Settlement Commission is without jurisdiction. Therefore, the said order of the Settlement Commission cannot be denuded of its efficacy by any collateral attack or in incidental proceedings.

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