2022 (5) TMI 1258 - HC - Customs

Issuance of summons directly to the Managing Director of the petitioner Company without providing the alternative of it being issued to an authorized representative - HELD THAT - In the instant case, no material is available that there is a reasoned view formed by the Department that the petitioner assessee is not cooperating or that the presence of the Managing Director specific is required for the investigation for any reason. This writ petition is disposed off by directing the departmental authorities issuing the summons under Section 108 of the Act of 1962 not to issue summons directly to the Managing Director of the petitioner Company and on the other hand to issue it to an authorized representative of the Company in terms of the provisions of the Circular dated 10.10.1989 - petition disposed off.

Summary

Issues:
1. Issuance of summons directly to the Managing Director of the petitioner Company without providing an alternative of it being issued to an authorized representative.
2. Interpretation of circular dated 13.10.1989 of the Central Board of Excise and Customs regarding summoning of Managing Directors and high officers of companies.
3. Compliance with the circular in summoning procedures under Section 108 of the Customs Act, 1962.

Analysis:

1. The High Court noted that a summon dated 27.04.2022 was issued directly to the Managing Director of the petitioner Company without considering the option of summoning an authorized representative instead. This raised concerns regarding the procedural fairness in the summoning process.

2. The petitioner's counsel referred to a circular dated 13.10.1989 of the Central Board of Excise and Customs, emphasizing that the practice is not to summon Managing Directors or Directors without justification. The circular highlighted that such summoning should be a last resort when assesses are uncooperative or investigations need expedited completion.

3. The Court observed that in the present case, there was no evidence to support that the petitioner was uncooperative or that the Managing Director's presence was specifically necessary for the investigation. Consequently, the Court directed the departmental authorities to adhere to the circular's guidelines and not issue summons directly to the Managing Director but to an authorized representative as per the circular dated 13.10.1989.

4. To ensure compliance, the Court instructed the petitioner Company to authorize a competent person from its Board of Directors to receive summons on its behalf. The Court further directed that any future summons should only be issued to the authorized person, and the summon dated 27.04.2022 should not be enforced, replacing it with a modified summons following the circular's provisions.

5. Ultimately, the writ petition was disposed of with the directive that summons under Section 108 of the Customs Act, 1962 should be issued in accordance with the circular dated 13.10.1989, ensuring fairness and procedural regularity in the summoning process.