S K MODI Vs. UNION OF INDIA

JUDGEMENT

(1.) Whether the Chairman of a Company incorporated under the Companies Act is personally liable to pay Inland Air Travel Tax ( in short, the 'IATT' ) is the question involved in this writ petition? The basic fact of the matter is not in dispute.

(2.) The petitioner herein was the Chairman of ModiLuft. ModiLuft is a 'carrier' within the meaning of Section 41 (c) of the Finance Act, 1989 (M/F). It paid IATT till February 1996. Thereafter no tax, however, was paid or paid within the specified period. Six show-cause notices have been issued to the Company by the Assistant Commissioner of Customs relating to the period March, 199 6/08/1996. On or about 14.11.1996, a detention memo in respect of a Being 737 aircraft was issued for not depositing a sum of Rs.10,40,90,255.00 on the ground that the carrier has failed to observe Inland Air Travel Tax Rules ( hereinafter referred to as the 'IATT Rules' ). The aircraft was detained in terms of Rule 14(4) of the IATT Rules as "belonging to or under-control of M/L". The said aircraft belonged to Air UK Leasing Ltd. (in short, 'AUKL' ), which had been leased out to the ModiLuft. AUKL filed a writ petition in this Court, which was marked as CWP No. 110 of 1997 for. quashing the aforementioned detention memo dated 14.11.1996. This Court by an order dated 20.01.1997 directed release of the aircraft stating :-

(3.) ModiLuft prayed for stay of the operation of the said order before the Chief Commissioner (Appeals) stating that no duty or penalty is payable by the petitioner, but no order was passed thereupon, despite the fact that the personal hearing was given in their behalf on 11.08.2000. Thereafter the impugned order of attachment dated 03.08.2000 was served upon the petitioner, the relevant portion of which reads as follows:-