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f) It is on the aforesaid facts that the petitioner has come to court seeking to quash the recovery proceedings against her under the Recovery Rules, 1995.

4 The Respondents have filed an affidavit in reply dated 2 February 2011 of the Asst. Commissioner of Central Excise to the present Petition in this Court. The Respondents have stated that the amounts of Rs.71,68,243/- as duty and Rs.25000/- as penalty are arrears of the Company. The Affidavit also points out that by an agreement dated 21 March 2000 entered into between Mukherjee Brothers and Kapoor family who together controlled the said company, the shares of the Kapoor family were transferred to Mukherjee Brothers. The aforesaid agreement also provided that the Mukherjee family would be responsible to discharge the Excise duty liabilities of the said company and therefore justifies the present proceeding against the Petitioner and her late father the Late Balram P Mukherjee. The Affidavit also stated that a Notice of Attachment was served upon the Late Balram P. Mukherjee under the Recovery Rules,1995 on 6 December 2005 and therefore the Gift deed dated 20 September 2009 was void in law. However, the alleged Notice of demand served on 6 December 2005 was not produced before the Court.

Mr. Pradeep Jetly, Counsel appearing for the Respondents submitted that the duty of Rs.71,68,743/- and penalty of Rs.25,000/-was arrears of the said company. However he contended that as far back as on 21 March 2000 by an Agreement the interest of Kapoor family in the said company was transferred to the late Balram P Mukherjee and his brother Suraj Mukherjeee i.e. Mukherjee Brothers. Further the aforesaid Agreement between the Kapoors and the Mukherjees provided that the discharge of Central Excise duties would be the responsibility of the Mukherjee Brothers. Therefore Mr. Jelty stressed that as a consequence of the transfer of share holding on 21 Mach 2000 between the Kapoor family and Mukherjee family the entire shareholding was transferred to Mukherjee family, who inter alia accepted their responsibility to discharge the central excise duty payable by the said Company. It was thereafter submitted that a notice of attachment under Rule 4 of the Recovery Rules 1995 was served on Balram P. Mukherjee on 6 December 1995 and therefore any transfer thereafter was a fraudulent ASN 10 WP-165.doc transfer of the said property. Consequently, it was submitted by Mr. Jetly that the attachment proceedings were in order and once notice under Rule 4 of the Recovery Rules 1995 has been served, then any further transfer of the said property either by way of gift, sale etc. was a fraudulent transfer done only with a intent to deprive the revenue of its dues. In view of the above, it was submitted by Mr. Jetly that the Court should not issue a writ in the present proceeding as the Respondents were completely within jurisdiction in seeking to recover the dues and penalty of the said company from its erstwhile Director late Balram P Mukherjee and his successor in title to the said property i.e. the Petitioner.

7 In rejoinder, Mr. Sreedharan Senior Counsel for the Petitioner submitted that the Respondents have not brought on record the alleged Attachment Notice dated 6 December, 1995 served upon the late Balram P Mukherjee and therefore the same should not be believed.

Without prejudice to the above he submitted that any recovery proceeding against the late Balram P Mukherjee is without jurisdiction as he cannot be liable for Excise dues/arrears of the said company in his capacity as a Director thereof. The Counsel further submitted that statutory dues cannot be contracted away without the State being a party to it. In support of the above submission he placed reliance upon the decision of the Supreme Court in the matter of Sha Sukraj Peerajee reported in (1968) Vol. XXI Sales Tax Cases Page 521.

Consequently the reliance of the Respondent upon the agreement dated 21 March 2000 between Kapoor family and Mukherjee Brothers to fasten the liability of excise duty and penalty arrears of the said company upon the late Balram P Mukherjee is not sustainable.

      ASN                                14                                WP-165.doc

     9            For the aforesaid      reasons, we allow the petition by
     quashing and setting aside




                                                                          
     a)           A Notice of demand dated 9 May 2011 issued to the father




                                                  
     of the Petitioner the late Balram P Mukherjee                by the Assistant