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2013 (10) TMI 64 - HC - CustomsAttachment and Recovery of Customs duties - Scope of the Definition “Defaulter” - Whether, for dues of the "defaulter", the appellants, i.e; wife and children of the defaulter, were entitled to be proceeded against and the properties standing in their name, applied to the satisfaction of such dues of the defaulter – Held that:- The 'defaulter' was the person who was conducting the business and the notice of default under the Rules was also served only on him - While invoking Rule 9, which prohibits alienation of properties in any manner, the properties of the wife and children were sought to be distrained - there was no power conferred on the officer to adjudicate on the ownership of a property held by another, deeming it to be ostensible ownership and find the defaulter to be the real owner - the Directors of a Company were sought to be proceeded against – Relying upon Sunil Parmeshwar Mittal v. Deputy Commissioner (Recovery Cell) [2005 (8) TMI 116 - HIGH COURT OF JUDICATURE AT BOMBAY] and Vandana Bidyut Chaterjee v. Union of India [2012 (4) TMI 42 - BOMBAY HIGH COURT] - The distinct legal status of a Company, apart from its Directors and shareholders were rightly noticed and the Directors were absolved from being proceeded with for recovery of dues from the Company to the Government and this was on a specific finding that the Statute and the Rules framed thereunder provided only for recovery from the "defaulter" and for proceedings against the property of the "defaulter". Benami Transactions - The transaction between the husband and wife cannot, going by the declaration of law, be ever termed as a benami transaction, since the Benami Act itself saves such transaction entered into for the benefit of the wife, even if the consideration is paid by the husband - To prove otherwise was the burden of the Department. Recovery Rules - Sustainability of Notices and Proceedings - neither the Act nor the Rules provide for any such proceeding to be taken against the wife or the sons and recovery to be made from the properties owned and possessed by such other persons - the judgment of the learned Single Judge is not liable to be interfered with, at all. The provision under Rule 9 making any transfer or delivery of a property attached as void would in any event be only effective from the date of notice under Rule 4, that too applicable only to the "defaulter's" properties. The transactions said to have been made by the defaulter in the name of the wife and children are all before such notice was served on the "defaulter". The transaction with respect to the property which was the subject matter of the suit, we notice, was long before even the transaction which led to the short-levy. - Appeal Dismissed.
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