By TIOL News Service

MUMBAI, SEPT 03, 2014: BY this Writ Petition the Petitioners, M/s Surlux Diagnostic Ltd are praying for a writ of mandamus or any writ, order or direction of that nature under Article 226 of the Constitution of India directing the Assistant Commissioner of Customs to withdraw the letter dated 29.05.2013.

Vide the letter dated 29.05.2013 addressed to the Secretary of the Chhadva Premises Coop Society Limited, the Assistant Commissioner prohibited the Society from transfer of property of rights in the flat owned by the Petitioner in the Building.

The Petitioner is a public limited company and the Petitioner Nos.2 and 3 are the purchasers of a flat which belongs to the Petitioner No.1.

It is the case of the department that there are some dues adjudged against one M/s Surlux Medicare and these units are under common management called Surlux Group of Companies and there is inter-connection among different units and that Group Companies have together defaulted in payment of the Government dues.

The Petitioner submitted that a reference to the Order in Original dated 31.05.2000, reveals that the same is passed not against the Petitioner No.1, but one M/s Surlux Medicare. That order refers to the Company as M/s Surlux Medicare and terms it as an importer. The Petitioner No.1 is M/s Surlux Diagnostic Limited. These are two distinct corporate entities and having independent legal existence. There is nothing on record which would indicate that the Commissioner of Customs is empowered to either attach or direct that there is an encumbrance of the Customs Department insofar as the subject flat is concerned. Unless and until it is demonstrated that the Petitioner No.1 has defaulted in payment of customs duty and therefore, the property/flat is required to be attached and sold during the course of recovery proceedings the present communication cannot be sustained.

After hearing both sides, the High Court held:

We would not be in a position to hold that there is a close connection or that the entire import was at the instance of the Group Companies and that is how the Petitioner No.1 was involved. The Respondent No.1 will have to adopt appropriate proceedings in the event it desires to now support his conclusions and which are stated to be based on the record. For the present we cannot proceed to hold that the Petitioner No.1 which is stated to be owner of the Flat No.58 could be deprived of its right, title and interest therein and particularly to transfer the flat in favour of the Petitioner Nos.2 and 3. The connection between the Petitioner Nos.2 and 3 and with the alleged Group of Companies has not been established. It is in these circumstances that addressing the communication to the Respondent No.2 was not justified.

As a result of the above discussion, the Writ Petition succeeds. The communication dated 29.05.2013 addressed by the Respondent No.1 to the Respondent No.2 is set aside.

The High Court also ruled that:

Without prejudice to the rights and contentions of both sides and since the Respondent No.1 desires to initiate the appropriate proceedings in accordance with law including to proceed against the Petitioners if permissible, that we direct that for a period of EIGHT WEEKS from today the Respondent No.2 shall not register the transfer of flat No.58 in favour of the Petitioner Nos.2 and 3 or any other persons claiming through them and stated to be under the Agreement of Sale executed by and between the Petitioner No.1 and Petitioner Nos.2 & 3. All contentions in relation to the action that the Respondent No.1 may propose to take and equally the Petitioners defence thereto are kept open.

(See 2014-TIOL-1490-HC-MUM-CUS)