Karnataka High Court
V. Vembu Iyer vs Collector Of Customs, Bombay And Anr. on 8 August, 1980
Equivalent citations: 1988(33)ELT646(KAR)
JUDGMENT
1. In this writ petition the challenge is to the proceedings taken by the second respondent-Tahsildar of Bangalore North Taluk, in attaching certain properties, belonging to the petitioner, purporting to be for purpose of recovery of certain penalties imposed on a firm M/s. New India Corporation, Bombay, by the Collector of Customs, Bombay, under Section 167(8) of the Sea Customs Act, 1878. The penalty in a sum of Rupees 3,27,700/- was imposed by an order dated 29-7-1963. The Tahsildar, pursuant to a certificate that had been issued by the Collector of Customs, purported to attach the immovable properties belonging to the petitioner and served an order of attachment and issued a notice (Exhibit 'A') stating that if the amount was not paid, the properties would be auctioned and the amount realised. The notice is dated 20-8-1975. The order made by the Collector, Customs, has been produced as Exhibit 'B'.
2. Inter alia it is contended that the penalty imposed against the firm cannot be recovered from the petitioner and it is stated that the firm has been dissolved. During the course of the argument Sri S. Srinivasan, learned counsel for the petitioner, however put forth in the forefront an argument that the certificate that had been issued by the Collector of Customs was only against the firm and on the basis of such a certificate recovery proceedings against the petitioner in his individual capacity cannot be taken. As it was not clear whether the certificate that was being given effect to was against the firm or against the petitioner, the matter was being adjourned from time to time.
3. The High Court Government Pleader for the Tahsildar was unable to produce the certificate that had been despatched from the Collector of Customs to the Special Deputy Commissioner, Bangalore, and it was submitted that the file that is with the Tahsildar and at the District Office, did not contain the certificate as such.
4. The Central Government Standing Counsel had also been directed to make enquiries and produce a copy of the certificate that had been issued or to state in whose name it had been issued. Sri Hakeem, learned Central Government Junior Standing Counsel, appearing for the first respondent has submitted today that the certificate that had been issued was against the firm New India Corporation and no certificate as such had been issued against the petitioner in his individual capacity.
5. In view of this submission, it is clear that the proceedings taken by the Tahsildar to attach the properties belonging to the petitioner is not warranted Vide (1974) 95 ITR 321 P. Balachand v. Tax Recovery Officer affirmed on appeal in (1980) 121 ITR 871 (Kant).
6. A certificate issued could be enforced only on the person named therein and not on any other party. Sri Hakeem, however, submitted that as the petitioner was admittedly partner of the firm and there is a liability against the firm, he is liable to discharge the liability. The liability, if any, of the petitioner in respect of the penalty imposed against the firm cannot be enforced on the basis of a certificate that has been issued only against a firm. Therefore the proceedings initiated by the Tahsildar are without jurisdiction. Accordingly attachment effected by him is without jurisdiction and is liable to be set aside.
7. Sri Hakeem, Central Government Junior Standing Counsel, appearing for the respondent, submitted that this should not prejudice the Customs authority from realising the penalty that has been imposed against the firm of which the petitioner was admittedly a partner. Penalty imposed as such is in no way affected by this order and it would be open to the authorities to take such proceedings as is open under law for realisation of the penalty.
8. The attachment of the property and notice as per Exhibit 'A' are quashed. Parties to bear their own costs. Writ petition allowed.