9911796707
TMI Blog2023 (11) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... the stake holders as per Section 52 or 53 of the Code, 2016 and that the Final Report discloses that the Liquidator has sold the Corporate Debtor as a going concern as such it is a fit case for closure of liquidation process, and accordingly ordered for closure of the liquidation proceedings against the corporate debtor. As per the judgments of the Hon ble Supreme Court in GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR ORS. [ 2021 (4) TMI 613 - SUPREME COURT ] and various other Courts, the amendment, which comes into existence subsequent to the launching of the proceedings are not applicable to the past acts. The laws or amendments made shall be prospective in nature and not retrospective and they cannot be ex post facto laws for punishing the accused. If the Legislature itself thought of clarifying the position of law, it would not be appropriate for the Court to assume that something else and then to go on to punish the person for criminal offences. Therefore, this Court is of the considered opinion that the petitioner shall not be punished for the offences register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied on them. Pursuant to the said show cause notice, an order in original No. Hyd-Excus-004-Com-074-16-17 dated 31.03.2017 was passed. It is further alleged that accused No. 2 is responsible for the conduct of business of the company and has committed the offences punishable under Section 89 of the Finance Act, 1994 read with Section 9, 9(1)(b)(bb)(bbb)(bbbb), 9(c) and 9AA of the Central Excise Act, 1944 (for short, the 1944 Act ), as made applicable to the Service Tax matter vide Section 83 of Finance Act, 1994. Basing on the said complaint, C.C. No. 124 of 2018 was registered. Seeking to quash the complaint in C.C. No. 124 of 2018 against him, the petitioner-accused No. 2 has filed the present writ petition. 3. The respondent Nos. 1 to 3 filed a detailed counter denying all the allegations made in the writ petition and inter alia stating that the prosecution in this case was launched by the Assistant Commissioner of Central Tax (Prosecution), Ranga Reddy GST Commissionerate, Hyderabad, basing on the administrative approval and necessary sanction accorded by the Chief Commissioner of Central Tax Customs, Hyderabad vide Letter C. No. I/10/30/2017-CC(HZ)-Legal dated 12.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was issued to the petitioner/accused No. 2 in respect of these contraventions. It is further contended that though the petitioner has specifically contended that he is not responsible for the day-to-day activities of the company and that he is not responsible for discharge of service tax liability, the Commissioner of Customs, Central Excise Service Tax, has not considered the same and passed the order in original dated 31.03.2017 on assumptions and surmises, which cannot be the basis for initiation of prosecution. It is further contended that the assessment and prosecution are two independent procedures and that the level and degree of proof required for initiating prosecution is much higher than what is required in an assessment proceedings. 5. The learned Senior Counsel has further contended that under Section 9AA of the 1944 Act, prior to initiation of the complaint, the petitioner ought to have been given an opportunity to establish that the offence was committed without his knowledge or he had exercised all due diligence to prevent the commission of offence; that the complainant in order to rope the petitioner as an accused has simply reproduced the language of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Hon ble Supreme Court in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited (2021) 9 SCC 657. 8. On the other hand, Sri Domin ic Fernandes, the learned Senior Standing Counsel for Central Excise appearing for the respondents, while reiterating the averments made in the counter affidavit, has contended that though the petitioner alleged that Section 32A of the Code, 2016 states that after initiation of the corporate insolvency resolution process, liability for any offences committed prior to the insolvency process shall cease and that a plain reading of Section 32A of the Code, 2016 inter alia provides that there are certain exclusions and exceptions for granting immunity where corporate Insolvency resolution process took place. He further contended that as per Second Proviso to Section 32A(1) of the Code, 2016, every person who was a designated partner as defined in clause (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009) or an officer who is in default, as defined in clause (60) of Section 2 of the Companies Act, 2013 (18 of 2013), or was in any manner incharge of, or responsible to the corporate debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. But, no provision of the IBC bars the continuation of the criminal prosecution initiated against the directors and officials. 9. Coming to the judgments relied upon by the learned Senior Counsel appearing for the petitioner, in Jagdish Lal Behi s case (1 supra), the Punjab and Haryana High Court held that so far as liability of the directors of the company is concerned, we might add that Section 278B which was brought on the statute book with effect from October 1, 1975, by the Taxation Laws (Amendment) Act, 1975, makes only the director who was in charge of the business of the company guilty of the offences in question. Since the offences were committed in the year 1965-69, we cannot apply the principle enshrined in this section to create ex post facto offences. To do so would tantamount to acting contrary to the clear mandate contained in Article 20 of the Constitution. 10. In S.M. Badsha s case, the Kerala High Court held that the last contention is that M/s. Metalex Agencies, being a firm, cannot be prosecuted since the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plan by the Adjudicating Authority a creditor including the Central Government, State Government or any local authority is entitled to initiate any proceedings for recovery of any of the dues from the Corporate Debtor, which are not a part of the Resolution Plan approved by the adjudicating authority?, the Hon ble Supreme Court held as under: Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued. 13. The above judgments relied upon by the learned Senior Counsel appearing for the petitioner applies to the present case. 14. A perusal of record discloses that the Liquidator of the accused No. 1-company has filed I.A. No. 215 of 2023 in CP (IB) No. 132/7/HDB/2019 praying for closure of the liquidation process of the corporate debtor and the National Company Law Tribunal, Hyderabad Bench-II vide order dated 07.02.2023 held that the assets of the Corporate Debtor were sol ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
