1980 (8) TMI 102 - HC - Customs

Summary

Issues: Challenge to attachment of properties for recovery of penalties under Sea Customs Act, 1878.

In this writ petition, the challenge is to the proceedings taken by the Tahsildar to attach properties belonging to the petitioner for the purpose of recovering penalties imposed on a firm under Section 167 (8) of the Sea Customs Act, 1878. The Tahsildar attached the immovable properties of the petitioner based on a certificate issued by the Collector of Customs against the firm M/s. New India Corporation, Bombay, for a penalty of Rupees 3,27,700. The petitioner argued that the penalty imposed on the firm cannot be recovered from him as the firm has been dissolved. The petitioner's counsel contended that the recovery proceedings against the petitioner in his individual capacity cannot be based on a certificate issued against the firm. The matter was adjourned multiple times as it was unclear whether the certificate was against the firm or the petitioner personally. The Tahsildar and the Government Pleader were unable to produce the certificate issued by the Collector of Customs.

The Central Government Standing Counsel confirmed that the certificate was issued against the firm, not against the petitioner individually. The High Court held that a certificate issued can only be enforced against the person named in it and not against any other party. Even though the petitioner was a partner in the firm, the liability against the firm cannot be enforced on him based on a certificate issued only against the firm. Therefore, the proceedings initiated by the Tahsildar to attach the petitioner's properties were without jurisdiction and the attachment was set aside. The Court clarified that this decision does not prejudice the Customs authority from realizing the penalty imposed on the firm, of which the petitioner was a partner. The penalty imposed on the firm remains unaffected by this order, and the authorities can take lawful steps to recover it. The Court quashed the attachment of the property and the notice served, with each party bearing their own costs. The writ petition was allowed.