NARINDER SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner through the present petition under Articles 226/227 of the Constitution of India prays for issuance of a writ of mandamus/prohibition restraining the respondents from taking coercive recovery measures against him.

(2.) A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. M/s Narindera Paper Mills Limited is engaged in the manufacture of paper products falling under Chapter heading 48 of Central Excise Tariff Act, 1985. The company was having sixteen Directors. The respondent department initiated investigation against the company which culminated into show cause notice whereby the company was called upon to show cause as to why duty amounting to Rs.2.65 crores should not be demanded and recovered from it. The company was also called upon to show cause as to why penalty should not be imposed. The company in its reply disputed the duty liability. The adjudicating authority held the company liable to pay duty alongwith penalty. Duty amounting to Rs.2.65 crores was confirmed against the company apart from equal amount of penalty. The company preferred an appeal before the Tribunal alongwith stay application under Sec. 35F of the Central Excise Act, 1944 (in short, "the 1944 Act"). The Tribunal vide order dtd. 12/1/2010 directed the company to make deposit of Rs.2.65 crores as pre-deposit. The company preferred CWP No.2187 of 2010 before the Delhi High Court seeking quashing of pre- deposit order passed by the Tribunal. Vide order dtd. 16/4/2010, Annexure P.2, the Delhi High Court remanded the matter to the Tribunal to consider plea of financial hardship. The company due to closure of its business could not comply with the orders of the Tribunal. The Tribunal vide order dtd. 10/6/2011, Annexure P.3 dismissed the appeal of the company for non compliance of condition of pre-deposit. The respondent-department vide order dtd. 2/2/2015, Annexure P.4 asked the petitioner to deposit outstanding dues of the company. In case of non deposit, appropriate action was to be initiated against the petitioner. The petitioner vide letter dtd. 16/2/2015, Annexure P.5, informed the respondents that a share holder could not be called upon to pay dues of the company. There was no market value of shares of the company. The liability of share holder was limited. There was no guarantee agreement for payment of dues of the company. The respondents vide recovery notice dtd. 18/6/2015, Annexure P.6, directed Bank of India, Chhaba Branch, Amritsar to transfer any amount lying in the credit of the company as well as the petitioner to the account of the Government. The Bank vide letter dtd. 16/11/2015, Annexure P.7, informed the petitioner that they had received a recovery notice under Sec. 11(2) of the 1944 Act from the office of Deputy Commissioner, Central Excise Division, Amritsar to remit the money lying in the account of Directors to the account of the Government of India. According to the petitioner, the respondents have initiated recovery proceedings under Sec. 11 of the 1944 Act. Under the said Act, there is no other provision of recovery. Further, there is no provision of recovery of outstanding excise dues of a company from its Directors or share holders like recovery of income tax from Directors of a private limited company. In the absence of specific provision, the respondents had no right to recover dues of a company from its share holder or Director. Hence the instant petition by the petitioner.

(3.) We have heard learned counsel for the parties.