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2007 Supreme(All) 2766
[2007(10) ADJ 261]
ALLAHABAD HIGH COURT
BEFORE : ASHOK BHUSHAN, J.
SUSHI KUMAR MAHESHWARI ..........Petitioner
Versus
UNION OF INDIA AND OTHERS ...........Respondents
(Civil Misc. Writ Petition No. 48573 of 2007, decided on 15th November, 2007)
Counsel :
Gopal Misra for the Petitioner; P.K. Pandey and S.C. for the Respondents.
Headnote:Income Tax Act, 1961—Sections 45-C, 45-D and 45-H—Employees, State Insurance Act, 1948—Sections 85, 86 and 77(1)(b)—Income Tax Rules, 1962—Rule 4—Recovery—Mode of—Issue of notice to petitioner, one of Director of Company by Dy. Director to show as to why petitioner be not committed to civil prison in execution of certificate of recovery—Petition against, praying that respondents not to take any coercive measure in relation of impugned notice—Impugned notice showed that petitioner failed to pay amount of Rs. 1,93,600 for period May, 1989 to May, 1991 and June, 1991 to December, 1996—Notice, thus, referred to two earlier certificates for period specified therein—Held, submission of petitioner that notice for arrest and detention, without adopting other modes, was against provisions of Statutes, was not acceptable—As notice, dt. 25-7-2007 has been issued giving reference to recovery certificates, dt. 14.9.1998 and 22-7-1993, i.e. after more than 9 years of issuance of recovery certificate—Hence, respondent-2 was directed to take a decision on reply/objection of petitioner, in respect of show-cause notice—Thus, till aforesaid objection of petitioner was decided, proceedings for recovery, initiated against petitioner, to be kept in abeyance. [Paras 9, 16, 20 and 21]
Hon’ble Ashok Bhushan, J.—Heard Sri Gopal Misra, learned Counsel for the petitioner and Sri P.K. Pandey, learned Counsel appearing for the respondent No. 2 as well as learned Standing Counsel.
2. With the consent of learned Counsel for the parties and looking to the nature of the issues raised in the writ petition, the writ petition is being disposed of at the admission stage itself, without inviting counter affidavit.
3. By means of present writ petition, the petitioner has prayed for a writ of certiorari, quashing the notice dated 25.7.2007, issued by the Deputy Director. Recovery Officer asking the petitioner to show cause as to why the petitioner be not committed to the civil prison in execution of the certificate for recovery. A writ of mandamus has also been sought for commanding the respondent No. 2 not to take any coercive measure in relation of the impugned notice and further directing the respondents No. 3 and 4 not to harass the petitioner on the basis of the impugned notice.
4. Brief facts of the case necessary to be noted for deciding the issues raised in the writ petition are; that the petitioner is one of the Directors of Company M/s Sri Tirupati Perfumers Pvt. Ltd. The petitioner’s case is that petitioner closed the company w.e.f. March, 1995 and a formal closure notice dated 24.3.1995 was served to all concerned. In the year 2006, the petitioner came to know about the complaint filed by the Insurance Inspector under Sections 85/86 of the Employees’ State Insurance Act, 1948 (hereinafter referred to as ‘1948 Act’) before the Chief Metropolitan Magistrate, Kanpur Nagar. The complaint was with regard to arrears of contribution from September, 1994 to April, 1997. The petitioner received a notice dated 25.7.2007, which stated that the petitioner failed to pay the amount of arrears of Rs. 1,93,630/- for the period May, 1989 to May, 1991 and June, 1991 to December, 1996. The notice stated that it is proposed to execute the recovery certificate by arrest and imprisonment. The petitioner filed a reply dated 3.9.2007 to the notice, copy of which has been filed as Annexure-5 to the writ petition. The petitioner thereafter filed this writ petition challenging the aforesaid notice.
5. Sri Gopal Misra, learned Counsel for the petitioner challenging the notice, made the following submissions in support of the writ petition :
(i) The respondents could not have resorted to the arrest and detention of the petitioner without first taking proceedings for recovery, if any against the properties of the establishment.
(ii) According to Section 77 (1) (b) of the 1948 Act, the respondents could have claimed the amount only within five years of the period to which such claim relates. The claim being for the period more than five years ago, the said claim is barred by Section 77(1) (b).
6. Learned Counsel for the petitioner in support of the above submissions, has placed reliance on the Division Bench judgment of the Andhra Pradesh High court in the case of Regional Provident Fund Commissioner, Employees Provident Fund Organisation, Hyderabad and another v. Deccan Foam Plastics Pvt. Ltd., Narsapur (Rep. by its M.D.), 2005 (105) FLR 1184 and Full Bench judgment of the Kerala High Court in the case of Director, Employees’ State Insurance Corporation v. Kerala Electrical and Allied Engineering Co. Ltd., 2003 (99) FLR 480.
7. Sri P.K. Pandey, learned Counsel appearing for the respondents refuting the submissions of the learned Counsel for the petitioner, contended that by virtue of Section 45-C of 1948 Act read with Section 45-H and second as well as third Schedule of Income Taxt Act, 1961, it was open for the respondents to resort to any mode of recovery as provided under Section 45-C. He further contends that Section 77 (1) (b) has no application in the present case since Section 77 is applicable with regard to claims raised before the Employees’ Insurance Court and present is not a case of any claim raised before the Employees’ Insuranc
