KEYUR SHAH Vs. UNION OF INDIA

JUDGEMENT

(1.) BY these Writ Petitions under Article 226 of the Constitution of India, two individuals claiming to be Directors of two companies one of which is a private limited company whereas other is a public limited company, challenge the communications whereunder the Deputy Director, Directorate of Revenue Intelligence, Mumbai Zonal Unit writes to the Secretary of Cooperative Housing Society in which the Petitioners have residential flats and to the Secretary of Soni Chambers wherein the Petitioners as Directors of two Companies are having their office, informing that for protecting interest of the Revenue, three immovable properties mentioned in the said communications should not be sold, transferred or leased out in any manner without written No Objection Certificate from the Directorate of Revenue Intelligence. It is submitted that even if certain proceedings are contemplated for evasion of customs duty or short payment thereof, the same can be initiated against the Companies. There are two limited companies and as Directors of the said two limited companies, the Petitioners cannot be proceeded for recovery of customs duty. At the best there is limited power to proceed against the Directors of the Company. In the present case, if allegations in the show cause notice addressed to the parties are true, then, insofar as the present Petitioners are concerned, they are proceeded against for recovery of penalty. The penalty amount is yet to be adjudicated and quantified. In these circumstances the communications of the present nature amounting to freezing of immovable properties, are not traceable to any of the provisions of Customs Act, 1962, or Rules made thereunder. The communications are, thus, without jurisdiction, null and void and consequently, the Writ Petitions under Article 226 of the Constitution of India are maintainable and the Petitioners need not take recourse to any other remedy.

(2.) ON the other hand, Mr. Jetly, learned counsel appearing for the Respondents, submitted that there are at least two provisions in the Customs Act, 1962, namely, Section 28BA and another Section 110, whereunder the communications of the present nature could have been addressed and issued. In doing so, what the Department proposes to do is to provisionally attach the immovable property to protect the revenue. In the present case, non -payment of duty is enormous. In every such matters, in the garb of avoiding payment and by urging that it is only Companies which can be proceeded against and not the Directors, the parties like the Petitioners make it virtually impossible for the Department to recover the amount and even after adjudication. Therefore, pending adjudication the communications can be issued and to protect a larger public interest. Therefore, this Court should not quash and set aside the impugned communications.

(3.) HOWEVER , Mr. Jetly has placed reliance on Section 28BA of the Customs Act, 1962 in order to support issuance of these communications. That provision reads thus: -