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2018 (8) TMI 1292 - HC - Service TaxEvasion of Service Tax - liability of outgoing Director of the company - Summons under Section 14 of the Central Excise Act, 1944 - violation of the provisions of Section 89 (1) (ii) of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Act, 2017 - the petitioner is alleged to have resigned from the directorship of the Company in question i.e. M/s. Proplarity Infratech Private Limited in the year 2016 and therefore he is denying to have any liability towards payment of any dues concerning service tax and is taking the plea that the liability for the same is upon the other two Co-Directors who are still running the business of the said Company. Held that:- The petitioner has also been issued a notice under Section 14 of the Central Excise Act, 1944 as made applicable to service tax matters vide Section 83 of the Finance Act, to interrogate the petitioner, to which the petitioner avoided from appearing before the investigating officer and has taken shelter of court by filing the present writ petition. It is also apparent that as per the scheme of the Finance Act an offence under Section 89 of Act is a cognizable offence by virtue of Section 90 and in Section 91 power of arrest is conferred upon an officer of the Central Excise Department not below the rank of Superintendent of Central Excise nominated by the Principal Commissioner of Central Excise or Commissioner of Central Excise who would adopt the same procedure as provided under Cr.P.C. for arrest. It is also made clear by the respondents that even if any Director resigns, he cannot seek exoneration from liability of making payment of service tax, simply because he resigned from the post of Director, if the service tax due is for the period when the accused was a Director. In the case at hand it is clarified by the respondents that there is a huge amount of service tax outstanding belonging to the period when the petitioner was one of the Directors of the said Company, therefore he cannot take the plea of not being liable to pay in terms of the “Deed of Settlement” which is alleged to have been executed between other two Co-Directors and him, the dues being statutory duty to be cleared. No case is made out in favour of the petitioner to pass any order prohibiting his arrest, if the same has to be carried out in accordance with the provisions as provided under the Finance Act - prayer dismissed.
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