The Bombay High Court ruled that the recovery of Rs. 2.94 lacs by quoting the PAN number of a third party was illegal and without justification. Accordingly, the Court directed the Customs Department to refund the said unauthorised amount to the petitioner, along with interest at the rate of 9%, within four weeks of the date of this order.
The Division Bench comprising Justice M.S. Sonak and Justice Advait M Sethna observed that the address of notice of demand to the petitioner for an amount of Rs. 2.94 lacs by referring to an incorrect PAN number was clearly an error for which no justification was offered. Based on such a demand, there was no question of the Respondent Department insisting on payment of duty and recovering this amount from the petitioner.
The Bench concluded that the claim of Rs 11.50 lacs must be pursued separately and in accordance with law, and the two monetary demands cannot be conflated. The Bench also directed the Commissioner of Customs to identify the responsible officers and recover the additional interest from them if the refund is delayed.
Briefly, the petitioner challenged the wrongful recovery of Rs. 2.94 by Customs authorities, which was demanded by referencing the PAN of a third party, M/s Variety Garments. The petitioner also sought a refund with interest and correction of official records. The Department argued that the petitioner was liable to pay over Rs 11.50 lakhs, including interest, towards a wrongly claimed customs drawback, and attempted to adjust the recovered amount against this alleged liability.
Appearances:
Advocates Kumar Kothari, Tushad Kakalia, and Kayomars Kerawalla, for the Petitioner/ Taxpayer
Advocates Jitendra B Mishra, Sangeeta Yadav, Ashutosh Mishra, and Rupesh Dubey, for the Respondent/ Revenue
