Lawstreet Journal

Gauhati HC: Managing Directors Of Companies To Be Summoned Only When Authorized Representatives Are Not Cooperating

Lawstreet Journal 23 May 2022 9:28pm

Image courtesy: Lawstreet Journal Business Gauhati HC: Managing Directors Of Companies To Be Summoned Only When Authorized Representatives Are Not Cooperating

On May 18, 2022, the Gauhati High Court held that, under Section 108 of the Customs Act 1962, a company's managing director(s) cannot be directly summoned by the authorities. If the company's authorised representatives aren't cooperating, or if the investigation needs to be completed quickly, then Managing Directors can only be summoned. This was clarified in "Century Plyboards (India) Ltd. & Anr. v. The Union of India & Ors."

A Single Judge Bench of Justice Achintya Malla Bujor Barua has observed that,

"…it is the practice of the Department not to issue the summons to the Managing Director or the other Directors without any justification and secondly, the summoning of the Managing Director or Director should be undertaken only as a last resort in cases where assesses are not cooperating or the investigations are to be completed expeditiously."

Facts:

As part of an enquiry into the import of EPCG Licenses by the petitioner Star Cement Meghalaya Limited, a summons dated 27.04.2022 and issued in accordance with Section 108 of the Customs Act, 1962, was delivered to the Managing Director of the petitioner company by name. This was done in furtherance of the enquiry. The petitioner Company's Managing Director was the recipient of the summons instead of an authorised representative.

Contention:

Dr. A. Saraf, the senior advocate for the petitioner, made reference to a circular that was issued by the Central Board of Excise and Customs on October 13, 1989. This circular instructed the departmental authorities not to summon the… Continue Reading...


Tagged: Gauhati High Court   Section 108   Customs Act 1962   Century Plyboards (India) Ltd. & Anr.   Justice Achintya Malla Bujor Barua   EPCG Licenses  
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