1997 (2) TMI 138 - HC - Central Excise

Summary

Issues: Valid service of show cause notice on the petitioner

The judgment addresses the issue of whether the show cause notice dated 30-9-1986 issued by the Collector of Central Excise was validly served upon the petitioner company. The petitioner, a public limited company, was involved in a series of mergers and name changes, leading to confusion regarding its corporate identity. The notice alleged evasion of central excise duties on cigarettes by mis-declaring assessable values. The notice was served on the Chairman of the company, who claimed he was not involved in day-to-day operations. The company contended that the notice was not served on them directly, raising questions of jurisdiction and time limitations under the Central Excises and Salt Act, 1944.

The judgment delves into the legal principles governing the service of notices under the Central Excise Act and the Companies Act. The petitioner argued that service on the Chairman did not equate to service on the company, emphasizing the importance of proper service for initiating legal action. The respondent, on the other hand, asserted that the Chairman could be deemed the authorized agent of the company, especially since the company had submitted to the jurisdiction by seeking clarification on the notice's validity. The court analyzed the relevant provisions of the Acts and the concept of piercing the corporate veil to determine liability for alleged fraud.

The court examined the specifics of the show cause notice, the responses from the company and individuals, and the subsequent legal actions taken. It highlighted the company's awareness of the notice contents and its objections raised regarding jurisdiction. The judgment emphasized the principle of natural justice and the actual receipt of the notice over technicalities of service methods. Additionally, the court discussed the role of the Chairman as the authorized agent based on the notice's content and the company's knowledge of the allegations. The judgment concluded that the plea of want of jurisdiction for a writ of prohibition was unfounded, dismissing the writ petition and imposing costs on the petitioner.