Home Case Index All Cases Central Excise Central Excise + HC Central Excise - 2020 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (11) TMI 283 - MADRAS HIGH COURTDemand of central excise arrears - Purchase of property in a public auction - whether there was attachment of liabilities and the same was passed along with the property or not? - When the question of recovery comes, there shall be a liability to pay the sum? HELD THAT:- The respondents 1 to 3 have not exercised the powers conferred under them and seized or attached the goods for which, they have granted exemption of duty. Once there is no charge over the plant or machinery, or other properties, the respondents 1 to 3 will fall under the unsecured creditors and they cannot prevail over the rights of the secured creditor - the transaction between the assesses or licensee and authorities is personal between them. It will not continue unless and otherwise there is a specific condition attached to the same. The auction purchasers cannot be held liable for the arrears incurred by the previous licensee or industry in facour of whom the tax benefits are granted. In various judgements, the categorical declaration is that the auction purchaser is not liable to pay any arrears, or duty or statutory dues for the default of the previous establishment. The right of the auction purchaser is absolute and independent of all the liabilities of the erstwhile establishment or owner. That transaction is personal, right or interest in personam between those parties will not bind on the auction purchaser - Reliance can be placed in the case of SPECIAL OFFICER, COMMERCE, NORTH EASTERN ELECTRICITY COMPANY OF ORISSA (NESCO) & ANR. VERSUS M/S RAGHUNATH PAPER MILLS PRIVATE LIMITED & ANR. [2012 (11) TMI 406 - SUPREME COURT]. Thus, the notice issues by the respondents 1 to 3 demanding arrears of tax or duty, committed by the previous owner from the petitioner / auction purchaser is without jurisdiction. The auction purchaser need not file an appeal against the notice or demand or order passed by the respondents. Since the notice is without jurisdiction, the writ petition is maintainable without any exhaustion of alternative remedy. It is always open to the respondents 1 to 3 to claim or demand the arrears of duty from the licensee or the beneficiary of the license and not from the writ petitioner who is a third party to that license - demand notices set aside - appeal allowed.
|