Kerala High Court
M/S.Sam Marine Exports vs Union Of India on 15 August, 2008
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
TUESDAY,THE 23RD DAY OF SEPTEMBER 2014/1ST ASWINA, 1936
WP(C).No. 18056 of 2013 (F)
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PETITIONERS :
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1. M/S.SAM MARINE EXPORTS,
SAKTHIKULANGARA P.O., SP 1/702, KOLLAM-691 581,
REPRESENTED BY ITS MANAGING PARTNER, SOLOMON ANTONY,
EADAMANA, SAKTHIKULANGARA, KOLLAM - 691 581.
2. SOLOMOMN ANTONY,
EADAMANA, SAKTHIKULANGARA, KOLLAM - 691 581.
3. BIJU SEBASTIAN,
EADAMANA, SAKTHIKULANGARA, KOLLAM - 691 581.
4. TRESA ROSE,
EADAMANA, SAKTHIKULANGARA, KOLLAM - 691 581.
BY SRI.A.V.THOMAS (SENIOR ADVOCATE)
ADVS.SMT.M.M.JASMIN
SRI.NIDHI SAM JOHNS
RESPONDENTS :
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1. UNION OF INDIA,
REPRESENTED BY THE SECRETARY,
MINISTRY OF COMMERCE AND INDUSTRY,
DEPARTMENT OF COMMERCE, CENTRAL SECRETRARIAT,
NEW DELHI-1.
2. DEPUTY DIRECTOR GENERAL OF FOREIGN TRADE,
KENDRIYA BHAVAN, KAKKANAD, KOCHI - 682 030
3. M/S.OCEANIC FISHERIES (INDIA) LTD.,
SAKTHIKULANGARA, KOLLAM, REPRESENTED BY TERRY RICHARD,
HOUSE NO.11/2, FISHERMEN COLONY, KOLLAM - 691 006.
R1 & R2 BY SRI.P.PARAMESWARAN NAIR , A.S.G
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 30.06.2014, THE COURT ON 23-09-2014 DELIVERED
THE FOLLOWING:
Msd.
WP(C).No. 18056 of 2013 (F)
APPENDIX
PETITIONER(S)' EXHIBITS
-------------------------------------
EXT.P1 : TRUE COPY OF THE DEED OF PARTNERSHIP OF THE FIRST
PETITIONER FIRM DATED 15-08-2008.
EXT.P2 : TRUE COPY OF THE CERTIFICATE OF IMPORTER EXPORTER CODE OF
THE FIRST PETITIONER DATED 01-12-2008.
EXT.P3 : TRUE COPY OF THE REGISTRATION OF THE FIRST PETITIONER FIRM
UNDER THE KERALA VALUE ADDED TAX ACT DATED 25-04-2009.
EXT.P4 : TRUE COPY OF THE LEASE DEED NO.1143 OF 2009 DATED 05-06-2009.
EXT.P5 : TRUE COPY OF THE SALE DEED NO.1711/2008 OF KOLLAM SRO
DATED 03-06-2008.
EXT.P6 : TRUE COPY OF THE SALE DEED NO.1712/2008 OF KOLLAM SRO
DATED 03-06-2008.
EXT.P7 : TRUE COPY OF THE CERTIFICATE OF REGISTRATION OF
PROCESSING PLANT OF THE FIRST PETITIONER UNDER THE MARINE
PRODUCTS EXPORT DEVELOPMENT AUTHORITY ACT
DATED 19-01-2010.
EXT.P8 : TRUE COPY OF THE SHOW CAUSE NOTICE ISSUED BY THE SECOND
RESPONDENT DATED 29-06-2012.
EXT.P9 : TRUE COPY OF THE REPLY SUBMITTED BY THE FIRST PETITIONER
TO THE SECOND RESPONDENT DATED 20-08-2012 WITHOUT THE
DOCUMENTS APPENDED TO THE SAME.
EXT.P10: TRUE COPY OF THE ORDER PASSED BY THE SECOND RESPONDENT
DATED 04-07-2013.
EXT.P11: TRUE COPY OF THE LETTER ADDRESSED TO THE SECOND
RESPONDENT BY THE FIRST PETITIONER DATED 16.08.2012.
EXT.P12: TRUE COPY OF THE COMMUNICATION ISSUED BY THE SECOND
RESPONDENT DATED 27.08.2012.
EXT.P13: TRUE COPY OF THE ADDITIONAL REPLY SUBMITTED BY THE FIRST
PETITIONER TO THE SECOND RESPONDENT DATED 10.09.2012.
EXT.P14: TRUE COPY OF THE LETTER ADDRESSED TO THE SECOND
RESPONDENT BY THE FIRST PETITIONER DATED 12.09.2012.
EXT.P15: TRUE COPY OF THE E-MAIL OF THE SECOND RESPONDENT
DATED 20.09.2012.
EXT.P16: TRUE COPY OF THE LETTER OF THE SECOND RESPONDENT
DATED 18.09.2012.
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WP(C).No. 18056 of 2013 (F)
EXT.P17: TRUE COPY OF THE REPLY E-MAIL SENT BY THE FIRST PETITIONER
TO THE SECOND RESPONDENT DATED 21.09.2012.
EXT.P18: TRUE COPY OF THE LETTER SENT BY THE FIRST PETITIONER TO
THE SECOND RESPONDENT DATED 21.09.2012.
EXT.P19: TRUE COPY OF LICENSE NO.1030000085/2/11/00 DATED 27.04.2001
ISSUED BY THE JOINT DIRECTOR GENERAL OF FOREIGN TRADE,
COCHIN, IN FAVOUR OF OCEANIC FISHERIES (INDIA) LTD.
EXT.P20: TRUE EXTRACT OF CHAPTER 4 OF EXPORT AND IMPORT POLICY FOR
THE PERIOD 1997-2002.
EXT.P21: TRUE EXTRACT OF CHAPTER 6 OF EXPORT AND IMPORT POLICY FOR
THE PERIOD 1997-2002.
EXT.P22: TRUE COPY OF LETTER NO.AE2/HT-SAN MARINE EXPORTS/2012-
13/136 DATED 07.08.2012 ISSUED FROM THE OFFICE OF THE DEPUTY
CHIEF ENGINEER, KERALA STATE ELECTRICITY BOARD, ELECTRICAL
CIRCLE, KOLLAM.
EXT.P23: TRUE COPY OF CERTIFICATE NO.B3/4197/2012 DATED 11.07.2012
ISSUED BY THE SENIOR JOINT DIRECTOR OF FACTORIES & BOILERS,
KOLLAM.
EXT.P24: TRUE COPY OF CERTIFICATE OF REGISTRATION DATED 20.01.2010
ISSUED BY MARINE PRODUCTS EXPORT DEVELOPMENT AUTHORITY.
EXT.P25: TRUE COPY OF SALE DEED NO.604/1965 DATED 03.02.1965 OF
KOLLAM SUB REGISTRY OFFICE.
EXT.P26: TRUE COPY OF SALE DEED NO.3308/1978 DATED 31.10.1978 OF
KOLLAM SUB REGISTRY OFFICE.
EXT.P27: TRUE COPY OF SALE DEED NO.2282/1990 DATED 20.07.1990 OF
KOLLAM SUB REGISTRY OFFICE.
EXT.P28: TRUE COPY OF SALE DEED NO.2305/1990 DATED 23.07.1990 OF
KOLLAM SUB REGISTRY OFFICE.
EXT.P29: TRUE COPY OF THE BASIC TAX RECEIPT NO.2029563
DATED 14.07.2011 ISSUED BY SAKTHIKULANGARA VILLAGE OFFICE.
EXT.P30: TRUE COPY OF THE BASIC TAX RECEIPT NO.2029565
DATED 14.07.2011 ISSUED BY SAKTHIKULANGARA VILLAGE OFFICE.
EXT.P31: TRUE COPY OF THE BASIC TAX RECEIPT NO.2029566
DATED 14.07.2011 ISSUED BY SAKTHIKULANGARA VILLAGE OFFICE.
EXT.P32: TRUE COPY OF THE TAX RECEIPT NO.10601 DATED 15.07.2008
ISSUED BY KOLLAM CORPORATION.
EXT.P33: TRUE COPY OF THE TAX RECEIPT NO.10860 DATED 15.07.2008
ISSUED BY KOLLAM CORPORATION.
Msd.
WP(C).No. 18056 of 2013 (F)
EXT.P34: TRUE COPY OF THE TAX RECEIPT NO.10861 DATED 15.07.2008
ISSUED BY KOLLAM CORPORATION.
EXT.P35: TRUE COPY OF THE TAX RECEIPT NO.10862 DATED 15.07.2008
ISSUED BY KOLLAM CORPORATION.
EXT.P36: TRUE COPY OF THE TAX RECEIPT NO.10863 DATED 15.07.2008
ISSUED BY KOLLAM CORPORATION.
EXT.P37: TRUE COPY OF THE TAX RECEIPT NO.10864 DATED 15.07.2008
ISSUED BY KOLLAM CORPORATION.
EXT.P38: TRUE COPY OF THE TAX RECEIPT NO.26407 DATED 19.11.2008
ISSUED BY KOLLAM CORPORATION.
EXT.P39: TRUE COPY OF THE ORDER DATED 13.11.2009 ISSUED BY KSEB
KOLLAM.
EXT.P40: TRUE COPY OF LICENSE WITH REGISTRATION NO.DO2/QLN/11/234/09
DATED 01.12.2011 ISSUED BY THE SENIOR DIRECTOR OF FACTORIES
AND BOILERS, KOLLAM.
EXT.P41: TRUE COPY OF THE CERTIFICATE OF APPROVAL DATED 26.02.2010
ISSUED BY EXPORT INSPECTION COUNCIL OF INDIA, MINISTRY OF
COMMERCE & INDUSTRY,GOVERNMENT OF INDIA, NEW DELHI.
EXT.P42: TRUE COPY OF ORDER DATED 29.09.2010 ISSUED BY EMPLOYEES
STATE INSURANCE CORPORATION, THRISSUR TO THE FIRST
PETITIONER.
EXT.P43: TRUE COPY OF ORDER DATED 19.08.2010 ISSUED BY EMPLOYEES
PROVIDENT FUND ORGANISATION, SUB REGIONAL OFFICE, KOLLAM.
EXT.P44: TRUE COPY OF THE INSPECTION REPORT DATED 15.09.2010
SUBMITTED BY P.S.DILEEP KUMAR, LICENSING ASSISTANT, TO
JOINT DIRECTOR GENERAL OF FOREIGN TRADE, COCHIN, ALONG
WITH COVERING LETTER ISSUED BY THE SECOND RESPONDENT TO
THE FIRST PETITIONER.
EXT.P45: TRUE COPY OF THE CANCELLATION DEED NO.1710/2008 OF KOLLAM
SUB REGISTRY OFFICE.
EXT.P46: TRUE COPY OF THE FRESH CERTIFICATE OF INCORPORATION
CONSEQUENT TO CHANGE OF NAME OF THE THIRD RESPONDENT.
RESPONDENT(S)' EXHIBITS
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NIL
//TRUE COPY//
P.A.TO JUDGE.
Msd.
A.M.SHAFFIQUE, J
* * * * * * * * * * * * *
W.P.C.No.18056 of 2013
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Dated this the 23rd day of September 2014
J U D G M E N T
This writ petition is filed seeking for a declaration that the first petitioner/partnership firm and its partners have no obligation to pay any amount to the respondents in terms with Ext.P8 notice and Ext.P10 order and for quashing the same.
2. Facts involved in the writ petition would disclose that the Director General of Foreign Trade had given an Export Promotion Capital Goods Authorisation (EPCG) licence to the 3rd respondent M/s.Oceanic Fisheries (India) Ltd. as per authorization dated 27/04/2001 for a value of US$.4,82,310/- with an obligation to export marine products worth US$.24,11,550/- within a period of 8 years from the date of issue of licence. The 3rd respondent did not furnish any documents for fulfillment of export obligation and notices issued were returned unserved. Though show cause W.P.C.No.18056/2013 2 notices were issued under Section 14 of the Foreign Trade (Development Regulation) Act, 1992 (hereinafter referred to as 'the Act') proposing action under Section 11(2) and 11(4) of the Act to the 3rd respondent as well as its directors, there was no reply. The Department conducted an inspection in the factory premises of the 3rd respondent and it was found that the same was occupied by the 1st petitioner firm. They assumed that the 1st petitioner firm has purchased the factory premises including the machinery from the 3rd respondent and had taken over all the assets and liabilities of the 3rd respondent. In that premise, the 2nd respondent has issued Ext.P8 notice dated 29/06/2012 to the 1st petitioner under Section 14 of the Act calling upon the 1st petitioner to show cause why they should not be called upon to pay customs duty of Rs.1,03,49,071/- with 24% interest against the EPCG authorisation for non-fulfillment of export obligation and violation of paragraph 6.2/6.8 of Exim Policy, 1997-2002. Petitioner submitted a reply to the show cause W.P.C.No.18056/2013 3 notice inter alia contending that the 1st petitioner firm was constituted on 15/08/2008 as a partnership firm. They have no title to the property in which they were conducting business. They have taken the property only as per lease deed dated 05/06/2009. The owners of the property has purchased the property from M/s.Oceanic Products Exporting Company, another partnership firm. The said firm M/s.Oceanic Products Exporting Company has purchased different items of land from various persons during 1965, 1978 and 1990. Smt.Rabecca Biju purchased 24.70 Ares as per sale deed dated 03/06/2008 and Sri.Philomin Antony purchased an extent of 22.32 Ares as per sale deed dated 03/06/2008. The deeds were executed by Oceanic products exporting company, the partnership firm. Further, Sri.Philomin Antony purchased 6 cents of property from one Akhil Johny who is a purchaser from the firm as per sale deed No.3679/2003. It is further stated that at the time when they purchased the property, the unit was not W.P.C.No.18056/2013 4 functioning in the property as the same was closed several years back when the electricity connection was dismantled and the Factories and Boilers Department had withdrawn the licence. It is further contended that as far as the 1st petitioner is concerned, it has repaired and renovated the buildings, new machineries were purchased and installed and the unit started functioning afresh. According to them, they have no connection whatsoever with the 3rd respondent. The owners have purchased the property from a partnership firm M/s.Oceanic Products Exporting Company and not from the 3rd respondent. On this basis, it was contended that the petitioners have no obligation to pay any amount to the 2nd respondent, as demanded.
3. By Ext.P10 order dated 04/07/2013, the 2nd respondent has directed 3rd respondent and its Directors to pay the department penalty of Rs.4,01,77,788/-. Further, the 1st petitioner and its partners have also been made liable to pay the penalty amount along with the Directors of the 3rd W.P.C.No.18056/2013 5 respondent company jointly on the ground that the liability for fulfillment of export obligation was a charge on the property transferred by the 3rd respondent to the 1st petitioner. It is inter alia observed in Ext.P10 that the petitioner/partnership firm is the family arrangement of Mr.Solomon Antony. Mr.Solomon Antony is the father of Mr.Philomin Antony, whose wife Mrs.Tresa Jose, is a partner of the 1st petitioner firm. Mr.Biju Sebastian another partner is the husband of Mrs.Rabecca Biju who is another buyer of the property from the 3rd respondent. The contention regarding lease is not accepted due to the fact that the son and daughter of managing partner Mr.Solomon Antony were the purchasers of the property. It is further observed that M/s.San Marine Export is also engaged in the same business of processing and export of marine sea food products which was also the business conducted by the 3rd respondent which proves that all the land, buildings and assets have been transferred and used by the 1st petitioner firm. W.P.C.No.18056/2013 6 Therefore, it is found that the liability of the seller that is the 3rd respondent is a charge on the property that belonged to them.
4. This order is impugned by the petitioners inter alia contending that they have absolutely no connection whatsoever with the 3rd respondent. That apart, 3rd respondent was not the owner of the property. The property originally was owned by a partnership firm from whom subsequent assignments have been made. The 3rd respondent company had stopped operations during 2003- 2004 and therefore there is no reason to impose any penalty on the petitioners.
5. Statement has been filed on behalf of the 2nd respondent supporting the stand taken in the impugned order. Petitioners have also filed certain additional documents to substantiate their contentions.
6. Heard Sri.A.V.Thomas, learned senior counsel appearing for the petitioners and the learned Assistant W.P.C.No.18056/2013 7 Solicitor General of India.
7. The main contention urged by the respondent is regarding maintainability of the writ petition on the ground that Ext.P10 is an appealable order. No doubt, any person aggrieved by any decision or order made by the adjudicating authority can prefer an appeal by virtue of Section 15 of the Act. But, the fact remains that, in the present case, the petitioners challenge the very jurisdiction of the 2nd respondent to issue the show cause notice against the petitioners to impose penalty on them. It is therefore argued by the learned senior counsel based on judgment of the Supreme Court in Whirlpool Corporation v. Registrar of Trade Marks [(1998) 8 SCC 81] that in spite of the existence of alternate remedy, of filing an appeal under the Statute, it is open for the petitioners to invoke jurisdiction under Article 226 of the Constitution, if the authority, against whom the writ is filed, is shown to have acted without jurisdiction. Another judgment relied upon is Popcorn W.P.C.No.18056/2013 8 Entertainment and Another v. City Industrial Development Corporation and Another [2007(9) SCC 593]. In the said judgment, the Supreme Court, by following the judgment in Whirlpool Corporation (supra) held that if the action of the respondent is illegal, or in violation of the principles of natural justice or if the petitioners' fundamental rights have been violated, there is no necessity to relegate the petitioner to avail the alternate remedy.
8. In the case on hand, the petitioners have a contention that the entire proceedings initiated by the 2nd respondent is without jurisdiction and the order is passed in gross violation of the principles of natural justice. In that view of the matter, I am of the view that the writ petition is maintainable and it is open for this Court to consider the contentions urged.
9. Apparently, penalty had been imposed on the petitioners only on the ground that they are in possession and occupation of the property which was owned by the 3rd W.P.C.No.18056/2013 9 respondent. Therefore it is clear that the liability to comply with export obligation was on the 3rd respondent and they alone are responsible for complying with the export obligation. As far as the petitioners are concerned, they have no direct involvement in the matter and under normal circumstances, no penalty can be imposed on them for non-compliance of an export obligation by another person. Therefore, fixing the liability on a third person who had acquired the property, which again is disputed, should be based on some statutory provision. To consider the question of jurisdiction of the 2nd respondent in initiating action against the petitioners, it will be useful to refer to the following statutory provisions.
10. Section 11 of the Act relates to Contravention of provision of the Act, Rules, Orders and Foreign Trade Policy which reads as under:
"11. Contravention of provisions of this Act, rules, orders and foreign trade policy.--(1) No export or import shall be made by any person except W.P.C.No.18056/2013 10 in accordance with the provisions of this Act, the rules and orders made thereunder and the foreign trade policy for the time being in force.
(2) Where any person makes or abets or attempts to make any export or import in contravention of any provision of this Act or any rules or orders made thereunder or the foreign trade policy, he shall be liable to a penalty of not less than ten thousand rupees and not more than five times the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more.
(3) Where any person signs or uses, or causes to be made, signed or used, any declaration, statement or document submitted to the Director General or any officer authorised by him under this Act, knowing or having reason to believe that such declaration, statement or document is forged or tampered with or false in any material particular, he shall be liable to a penalty of not less than ten thousand rupees or more than five times the value of the goods or services or technology in respect of which such declaration, statement or document had been submitted, whichever is more.
(4) Where any person, on a notice to him by the adjudicating Authority, admits any contravention, the W.P.C.No.18056/2013 11 Adjudicating Authority may, in such class or classes of cases and in such manner as may be prescribed, determine, by way of settlement, an amount to be paid by that person.
(5) A penalty imposed under this Act may, if it is not paid by any person, be recovered by any one or more of the following modes, namely--
(a) the Director General may deduct or require any officer subordinate to him to deduct the amount payable under this Act from any money owing to such person which may be under the control of such officer; or
(b) the Director General may require any officer of customs to deduct the amount payable under this Act from any money owing to such person which may be under the control of such officer of customs, as if the said amount is payable under the Customs Act, 1962 (52 of 1962); or
(c) the Director General may require the Assistant Commissioner of Customs or Deputy Commissioner of Customs or any other officer of Customs to recover the amount so payable by detaining or selling any goods (including the goods connected with services or technology) belonging to such person which are under the control of the Assistant Commissioner of Customs or Deputy Commissioner of Customs or any other W.P.C.No.18056/2013 12 officer of Customs, as if the said amount is payable under the Customs Act, 1962 (52 of 1962); or
(d) if the amount cannot be recovered from such person in the manner provided in clauses (a), (b) and
(c),--
(i) the Director General or any officer authorised by him 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 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 Director General or any officer authorised by him [including an officer of Customs who shall then exercise his powers under the Customs Act, 1962 (52 of 1962)], and in accordance with the rules made in this behalf, detain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid, as if the said amount is payable under the Customs Act, 1962; and in case, any pert 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, W.P.C.No.18056/2013 13 may satisfy the amount payable and costs including cost of sale remaining unpaid and shall render the surplus, if any to such person.
(6) Where the terms of any bond or other instrument executed under this Act or any rules made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub- section (5), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section.
(7) Without prejudice to the provisions contained in this section, the Importer-Exporter Code Number of any person who fails to pay any penalty imposed under this Act, may be suspended by the Adjudicating Authority till the penalty is paid or recovered, as the case may be.
(8) Where any contravention of any provision of this Act or any rules or orders made thereunder or the foreign trade policy has been, is being, or is attempted to be, made, the goods (including the goods connected with services or technology) together with any package, covering or receptacle and any conveyances shall, subject to such conditions and requirements as may be prescribed, be liable to confiscation by the Adjudicating Authority.
(9) The goods (including the goods connected with W.P.C.No.18056/2013 14 services or technology) or the conveyance confiscated under sub-section (8) may be released by the Adjudicating Authority, in such manner and subject to such conditions as may be prescribed, on payment by the person concerned of the redemption charges equivalent to the market value of the goods or conveyance, as the case may be."
11. Show cause notice is issued under Section 11. Under Section 11(2) a liability can be imposed only on a person who makes or abets or attempts to make any export or import in contravention of any provision of the Act or any Rules or Orders made thereunder. If the penalty is not paid, provision is made under sub Section (5) to recover the said amount by any one or more of the modes prescribed under Clauses (a) to (d). Section 11(2) apparently is not concerned with the petitioners. Petitioners are neither persons who had made any export or import or has abetted the making of any export or import or had attempted to make any export or import. Therefore Section 11(2) has no application. At best, it may only apply to the 3rd respondent. W.P.C.No.18056/2013 15
12. Therefore, the first question that may arise would be, even assuming that the petitioners have purchased the assets of the 3rd respondent, can a penalty be imposed on the petitioner. Perusal of the Act or the Rules does not give any such power to the 2nd respondent to impose penalty on a third person merely for the reason that he or she had purchased the property of a defaulter. The adjudicating authority by exercising power under Section 13 forms an opinion that the amount to be recovered from the 3rd respondent is a charge on the property. First of all, there is no statutory provision which indicates that the property of an exporter or importer who violates the provisions of the Act or Rules will be a charge for the amount of penalty to be recovered or for any amount due. When the Statute has clearly provided for a mechanism for recovery of the amounts by a process as envisaged under Section 11, and when the statutory provision does not indicate anywhere that any penalty imposed will be a charge on the property W.P.C.No.18056/2013 16 which belongs to the defaulter at the time when the licence was issued, such a charge cannot be inferred nor can be imposed on the property. Therefore, the very finding of the 2nd respondent that the they have a charge on the property of 3rd respondent is without any basis.
13. That apart, even assuming that there is a charge on the property, the department cannot proceed against the petitioners for recovery of any amount nor can any penalty be imposed on them. At best, they could only recover the amount by enforcing the charge by due process of law and not by imposing penalty on the petitioners.
14. Proceeding a little further into the factual situation available in the case, it is clear that the petitioners had brought to the notice of the adjudicating authority that the owners have purchased the property from a partnership firm, M/s.Oceanic Products Exporting Company and relevant sale deeds were also produced. The Adjudicating authority proceeded on the basis that the property belongs to the 3rd W.P.C.No.18056/2013 17 respondent. Third respondent is a company registered under the provisions of the Companies Act, whereas Oceanic Products Exporting Company is a partnership firm who had original ownership in respect of the property. They have, in turn, sold the property to the persons aforementioned. Therefore, it is not a case where the 3rd respondent was the owner of the property. This aspect of the matter was conveniently omitted to be noticed or considered by the Adjudicating Authority. When an issue in relation to right to property is evaluated, the Adjudicating Authority was bound to consider such aspects before taking a cursory approach by forming an opinion that the property belonged to the 3rd respondent. It might be an instance where the 3rd respondent was carrying on the business of running the unit in the property belonging to M/s.Oceanic Products Exporting Company. But, that does not mean that the 3rd respondent has title to the property.
W.P.C.No.18056/2013 18
15. For all the above reasons, I am satisfied that the very initiation of proceedings against the petitioners were without jurisdiction and the said proceedings are liable to be quashed.
Accordingly, the writ petition is allowed. Ext.P8 notice and Ext.P10 order, to the extent it imposes liability on the petitioners, are quashed without prejudice to the right of the department to recover the penalty from the 3rd respondent, its directors and their assets, in accordance with law.
(sd/-) (A.M.SHAFFIQUE, JUDGE) jsr