TMI Blog2024 (4) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... r - there is no manner of doubt that the impugned order passed against the petitioner is illegal and cannot be sustained. It is certainly in breach of the rights guaranteed to the petitioner under Article 14, read with Article 300A, of the Constitution. The attachments are lifted - petition allowed. - G. S. KULKARNI FIRDOSH P. POONIWALLA, JJ. For the Petitioner : Mr. Arun Jain i/b Mr. Kartik Vig. For the State : Ms. Shruti D. Vyas, Addl. G.P. a/w Ms. P.N. Diwan, A.G.P. ORAL JUDGEMENT (PER G.S. KULKARNI, J.) : 1. Rule. Rule made returnable forthwith. 2. Heard finally by consent of the parties. 3. This petition, under Article 226 of the Constitution of India, has prayed for the following reliefs: (a) that this Hon'ble Court be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner's case and after going into the validity and legality thereof to quash and set aside the (I) Order of Attachment No. STO/MUM-BCP-C-005 (Kurla-701)/Recovery/ Attachment/2018-19/2023-24/B-323 dated 11.01.2024 [Exhibit A ] issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a director in the said company only for some period. In March 2018, as there was vacancy in the Board of Directors due to the petitioner s DIN being disqualified, the petitioner informed the Board to look for an alternate director. 7. In pursuance thereof, on 1st June 2018, Mr. Vishal Tanna was appointed as a new director to replace the petitioner. Although, all this happened, the formal submission of the resignation of the petitioner had remained. In these circumstances, on 15th May 2019, the petitioner formally resigned as a director of the company. 8. The case of the petitioner is that, on 25th May 2019, the petitioner ceased to be a Director of the company. It appears from what has been stated by the petitioner that, on 7th August 2020, show cause notice came to be issued against the company demanding Goods and Service Tax (GST) of Rs. 2,17,28,084/- along with interest of Rs. 1,19,31,274/- and a penalty of Rs. 2,17,28,084/-. On such show cause notice an order came to be passed on 27th November 2020 and a total demand of Rs. 5,53,87,442/- came to be confirmed. 9. It has been contended by the petitioner that recovery against the Company and its Directors could not be taken for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, Ms. Vyas, the learned counsel for the Respondents would support the impugned Attachment Order. It is her case that, as the petitioner was the director for some time, it was hence justified for the department to proceed against the petitioner by issuing the impugned attachment orders. She would submit that the petition accordingly be rejected. 13. There is a rejoinder affidavit placed on record contesting the contention as raised on behalf of the respondents in reply affidavit. It is on such backdrop, we have heard the learned counsel for the parties. 14. At the outset, we may observe that recovery sought to be made under the impugned order dated 27th November 2020 is for the period 1st April 2018 to 31st March 2019. 15. It appears that the petitioner had made out a case before the department that, in November 2017, the petitioner s DIN, as filed with the Registrar of Companies, was disqualified under the provisions of Section 164 (2)(a) of the Companies Act. It is also the case of the petitioner that from March 2018, the petitioner had not taken any active part in the day to day affairs of the company. It is also the petitioner s case that a new director was appointed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount; (ii) every person to whom the notice is issued under sub-clause (i) shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary; (iii) in case the person to whom a notice under sub-clause (i) has been issued, fails to make the payment in pursuance thereof to the Government, he shall be deemed to be a defaulter in respect of the amount specified in the notice and all the consequences of this Act or the rules made thereunder shall follow; (iv) the officer issuing a notice under sub-clause (i) may, at any time, amend or revoke such notice or extend the time for making any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om such person the amount specified thereunder as if it were an arrear of land revenue; (f) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the proper officer may file an application to the appropriate Magistrate and such Magistrate shall proceed to recover from such person the amount specified thereunder as if it were a fine imposed by him. (2) Where the terms of any bond or other instrument executed under this Act or any rules or regulations made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section. (3) Where any amount of tax, interest or penalty is payable by a person to the Government under any of the provisions of this Act or the rules made thereunder and which remains unpaid, the proper officer of State tax or Union territory tax, during the course of recovery of said tax arrears, may recover the amount from the said person as if it were an arrear of State tax or Union territory tax and credit the amount so recovered to the account of the Government. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis the respondents have proceeded to make the attachment of the petitioner s property, is not known. No reasons are attributed whatsoever except for the impugned order. 20. We would not accept the reasons furnished in the reply affidavit as the same would be contrary to the settled position of law. Thus, there is no manner of doubt that the impugned order passed against the petitioner is illegal and cannot be sustained. It is certainly in breach of the rights guaranteed to the petitioner under Article 14, read with Article 300A, of the Constitution. 21. The Petition accordingly succeeds. It is allowed in terms of prayer clauses (a) and (b), which read thus: (a) that this Hon'ble Court be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner's case and after going into the validity and legality thereof to quash and set aside the (I) Order of Attachment No. STO/MUM-BCP-C-005(Kurla-701)/Recovery/ Attachment/2018-19/2023-24/B-323 dated 11.01.2024 [Exhibit A ] issued by the Respondent No. 3; and (ii) Notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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