Wp(C)/10675/2018 Of Mailakkattu Varghese Uthup v. The Principal Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 11TH DAY OF JUNE 2018 / 21ST JYAISHTA, 1940 WP(C).No. 10675 of 2018 PETITIONER: MAILAKKATTU VARGHESE UTHUP, S/O.THOMAS VARGHESE, MAILAKKATTU HOUSE, PUTHUPPALLY P.O., KOTTAYAM DISTRICT-686 011. BY ADV.SMT.PREETHA S.NAIR RESPONDENT(S): 1. THE PRINCIPAL COMMISSIONER OF INCOME TAX, C.R.BUILDING, I.S.PRESS ROAD,KOCHI-682 018. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, ERNAKULAM, ALFA LIZA BUILDING, NEAR AMBADY CHAMBERS, CHITOOR ROAD, OPP. SRV LP SCHOOL, KOCHI-682 011. 3. DIRECTOR GENERAL OF INCOME TAX (INV), S.A.ROAD, KOCHI-682 020. 4. BUREAU OF IMMIGRATION, (MINISTRY OF HOME AFFAIRS), COCHIN INTERNATIONAL AIRPORT LTD., KOCHI-682 311. *ADDL.R5 IMPLEADED *R5. THE REGISTRAR OF COMPANIES, KOCHI. *ADDL.R5 IS SUO MOTU IMPLEADED AS PER ORDER DATED 03/04/2018. R1 TO R3 BY SRI.JOSE JOSEPH, SC, R4 & R5 BY SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL OF INDIA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11-06-2018,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 10675 of 2018 (H) APPENDIX PETITIONER(S)' EXHIBITS EXHIBIT P1- TRUE COPY OF THE BAIL ORDER DATED 10/08/2017 PASSED BY THIS HON'BLE COURT IN B.A.NO.4615 OF 2017. EXHIBIT P2- TRUE COPY OF THE ORDER DATED 21/12/2017 PASSED BY THE COURT OF THE ADDITIONAL SPECIAL SESSIONS JUDGE (SPE/CBI)-III, ERNAKULAM IN CRL.M.P.NO.685/17 IN C.C.NO.1/17. THE COURT OF THE ADDITIONAL SPECIAL SESSIONS JUDGE (SPE/CBI)-III, ERNAKULAM IN CRL.M.P.NO.685/17 IN C.C.NO.1/17. EXHIBIT P3- TRUE COPY OF THE LETTER ISSUED TO VARGHESE UTHUP MAILAKKATTU, THE PETITIONER HEREIN FIXING THE DATE OF APPOINTMENT WITH THE OSC SK NEPHROLOGY TO 18/03/2018. FIXING THE DATE OF APPOINTMENT WITH THE OSC SK NEPHROLOGY TO 18/03/2018. EXHIBIT P4- TRUE COPY OF THE DOCUMENT DATED 04/01/2018 GIVING APPOINTMENT TO THE PETITIONER FOR CONSULTATION AT IMPERIAL COLLEGE OF LONDON DIABETES CENTRE. GIVING APPOINTMENT TO THE PETITIONER FOR CONSULTATION AT IMPERIAL COLLEGE OF LONDON DIABETES CENTRE. EXHIBIT P5- TRUE COPY OF THE ORDER DATED 06/03/2018 OF THIS HON'BLE COURT IN CRL.M.A.NO.1971/2018 IN B.A.NO.4615/2017. HON'BLE COURT IN CRL.M.A.NO.1971/2018 IN B.A.NO.4615/2017. EXHIBIT P6- TRUE COPY OF THE APPLICATION DATED 13/03/2018 FILED BY THE PETITIONER (WITHOUT ANNEXURES) BEFORE THE CBI COURT FOR RELEASE OF THIS PASSPORT. FILED BY THE PETITIONER (WITHOUT ANNEXURES) BEFORE THE CBI COURT FOR RELEASE OF THIS PASSPORT. EXHIBIT P7- TRUE COPY OF THE ORDER DATED 15/03/2018 OF THE CBI COURT IN CRL.M.P.NO.182/2018 IN C.C.NO.1/2017 CBI COURT IN CRL.M.P.NO.182/2018 IN C.C.NO.1/2017 EXHIBIT P8- TRUE COPY OF THE ORDER DATED 05/03/2018 PASSED BY THE 2ND RESPONDENT UNDER SECTION 230 OF THE INCOME TAX ACT. THE 2ND RESPONDENT UNDER SECTION 230 OF THE INCOME TAX ACT. EXHIBIT P9(A)- TRUE COPY OF THE ASSESSMENT ORDER DATED 29/11/2016 FOR AY 2009-10. 29/11/2016 FOR AY 2009-10. EXHIBIT P9(B)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2010-11. 30/11/2016 FOR AY 2010-11. EXHIBIT P9(C)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2012-13. 30/11/2016 FOR AY 2012-13. EXHIBIT P9(D)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2013-14. 30/11/2016 FOR AY 2013-14. EXHIBIT P9(A)- TRUE COPY OF THE ASSESSMENT ORDER DATED 29/11/2016 FOR AY 2009-10. 29/11/2016 FOR AY 2009-10. EXHIBIT P9(B)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2010-11. 30/11/2016 FOR AY 2010-11. EXHIBIT P9(C)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2012-13. 30/11/2016 FOR AY 2012-13. EXHIBIT P9(D)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2013-14. 30/11/2016 FOR AY 2013-14. EXHIBIT P9(E)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2014-15. 30/11/2016 FOR AY 2014-15. WP(C).No. 10675 of 2018 (H) EXHIBIT P9(F)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2015-16. 30/11/2016 FOR AY 2015-16. EXHIBIT P10(A)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 19/03/2018 FOR AT 2009-10. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 19/03/2018 FOR AT 2009-10. WP(C).No. 10675 of 2018 (H) EXHIBIT P9(F)- TRUE COPY OF THE ASSESSMENT ORDER DATED 30/11/2016 FOR AY 2015-16. 30/11/2016 FOR AY 2015-16. EXHIBIT P10(A)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 19/03/2018 FOR AT 2009-10. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 19/03/2018 FOR AT 2009-10. EXHIBIT P10(B)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 20/03/2018 FOR AT 2010-11.EXHIBIT P10(C)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 20/03/2018 FOR AT 2012-13.EXHIBIT P10(D)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 21/03/2018 FOR AT 2013-14.EXHIBIT P10(E)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 21/03/2018 FOR AT 2014-15.EXHIBIT P10(F)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 21/03/2018 FOR AT 2015-16.EXHIBIT P11- TRUE COPY OF COMMUNICATION DATED 23/03/2018 REGARDING STAY FOR BALANCE DEMAND ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-4.EXHIBIT P12- TRUE COPY OF FORM 32 RETURN FILED BY THE COMPANY BEFORE ROC, KERALA, KOCHI.EXHIBIT P13- TRUE COPY OF ORDER PASSED UNDER SECTION 179 DATED 14/08/2017.EXHIBIT P14- TRUE COPY OF THE APPLICATION DATED 26/05/2017 FILED BY THE PETITIONER'S CHARTERED ACCOUNTANT BEFORE THE 2ND RESPONDENT INFORMING HIM THAT THE PETITIONER WAS IN JUDICIAL CUSTODY.EXHIBIT P15- TRUE COPY OF THE ATTACHMENT ORDER DATED 16/08/2016 ISSUED BY THE 2ND RESPONDENT.EXHIBIT P16- TRUE COPY OF THE LETTER INTIMATING THE APPOINTMENT FOR CONSULTATION IN OSC SK NEPHROLOGY (MEDICINE NEPHROLOGY) TO THE PETITIONER FOR 01/04/2018. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 20/03/2018 FOR AT 2010-11.EXHIBIT P10(C)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 20/03/2018 FOR AT 2012-13.EXHIBIT P10(D)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 21/03/2018 FOR AT 2013-14.EXHIBIT P10(E)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 21/03/2018 FOR AT 2014-15.EXHIBIT P10(F)- TRUE COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM DATED 21/03/2018 FOR AT 2015-16.EXHIBIT P11- TRUE COPY OF COMMUNICATION DATED 23/03/2018 REGARDING STAY FOR BALANCE DEMAND ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-4.EXHIBIT P12- TRUE COPY OF FORM 32 RETURN FILED BY THE COMPANY BEFORE ROC, KERALA, KOCHI.EXHIBIT P13- TRUE COPY OF ORDER PASSED UNDER SECTION 179 DATED 14/08/2017.EXHIBIT P14- TRUE COPY OF THE APPLICATION DATED 26/05/2017 FILED BY THE PETITIONER'S CHARTERED ACCOUNTANT BEFORE THE 2ND RESPONDENT INFORMING HIM THAT THE PETITIONER WAS IN JUDICIAL CUSTODY.EXHIBIT P15- TRUE COPY OF THE ATTACHMENT ORDER DATED 16/08/2016 ISSUED BY THE 2ND RESPONDENT.EXHIBIT P16- TRUE COPY OF THE LETTER INTIMATING THE APPOINTMENT FOR CONSULTATION IN OSC SK NEPHROLOGY (MEDICINE NEPHROLOGY) TO THE PETITIONER FOR 01/04/2018. WP(C).No. 10675 of 2018 (H) WP(C).No. 10675 of 2018 (H) EXHIBIT P17(A)COPY OF THE PENALTY ORDER DATED 30/05/2017 FOR ASSESSMENT YEAR 2009-10 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHIASSESSMENT YEAR 2009-10 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHI EXHIBIT P17(B)COPY OF THE PENALTY ORDER DATED 30/05/2017 FOR ASSESSMENT YEAR 2010-11 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHIASSESSMENT YEAR 2010-11 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHI EXHIBIT P17(C)COPY OF THE PENALTY ORDER DATED 30/05/2017 FOR ASSESSMENT YEAR 2012-13 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHIASSESSMENT YEAR 2012-13 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHI EXHIBIT P17(D)COPY OF THE PENALTY ORDER DATED 30/05/2017 FOR ASSESSMENT YEAR 2014-15 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHIASSESSMENT YEAR 2014-15 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHI EXHIBIT P17(E)COPY OF THE PENALTY ORDER DATED 30/05/2017 FOR ASSESSMENT YEAR 2015-16 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHIASSESSMENT YEAR 2015-16 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOCHI EXHIBIT P18(A)COPY OF THE APPEAL DATED 25/03/2018 FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2009-10PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2009-10 EXHIBIT P18(B)COPY OF THE APPEAL DATED 26/03/2018 FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2010-11PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2010-11 EXHIBIT P18(C)COPY OF THE APPEAL DATED 26/03/2018 FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2012-13PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2012-13 EXHIBIT P18(D)COPY OF THE APPEAL DATED 26/03/2018 FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2014-15PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2014-15 EXHIBIT P18(E)COPY OF THE APPEAL DATED 26/03/2018 FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2015-16PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ERNAKULAM FOR ASSESSMENT YEAR 2015-16 EXHIBIT P19COPY OF THE STAY ORDER DATED 27/3/2018 ALONG WITH CHALLANS EVIDENCING PAYMENT OF THE 20% OF THE DISPUTED DEMANDCHALLANS EVIDENCING PAYMENT OF THE 20% OF THE DISPUTED DEMAND EXHIBIT P20COPY OF THE FORM 32 FILED ON 30/10/2009 CERTIFIED AS TRUE COPY OF THE REGISTRAR OF COMPANIES, ERNAKULAMTRUE COPY OF THE REGISTRAR OF COMPANIES, ERNAKULAM WP(C).No. 10675 of 2018 (H) RESPONDENT'S ANNEXURES: ANNEXURE R2(B)COPY OF THE LETTER FROM THE OFFICE OF THE DIRECTOR GENERAL CONVEYING THE APPROVAL OF DGIT DATED 27/02/2018 /TRUE COPY/P.A.TO JUDGE sts13/6/2018 P.B.SURESH KUMAR, J. -------------------------------------------- W.P.(C).No.10675 of 2018-H --------------------------------------------------------------- Dated this the 11th day of June, 2018 J U D G M E N T Exts.P8 and P13 orders issued under Sections230 and 179, respectively of the Income Tax Act (“theAct”), are under challenge in the writ petition.2.The facts relevant for adjudication of theissues raised are the following: The petitioner is the third accused in WP(C).No. 10675 of 2018 (H) RESPONDENT'S ANNEXURES: ANNEXURE R2(B)COPY OF THE LETTER FROM THE OFFICE OF THE DIRECTOR GENERAL CONVEYING THE APPROVAL OF DGIT DATED 27/02/2018 /TRUE COPY/P.A.TO JUDGE sts13/6/2018 P.B.SURESH KUMAR, J. -------------------------------------------- W.P.(C).No.10675 of 2018-H --------------------------------------------------------------- Dated this the 11th day of June, 2018 J U D G M E N T Exts.P8 and P13 orders issued under Sections230 and 179, respectively of the Income Tax Act (“theAct”), are under challenge in the writ petition.2.The facts relevant for adjudication of theissues raised are the following: The petitioner is the third accused in C.C.No.1/2017 on the files of the Additional SpecialSessions Judge (SPE/CBI)-III, Ernakulam. The said case isone registered on a final report filed by the Central Bureauof Investigation in connection with recruitment of nursesto Kuwait by a company called M/s.Al Zarafa Travels andManpower Consultants Pvt.Ltd. (“the company”). Thepetitioner was not arrested in the case at the stage ofinvestigation. According to the petitioner, he was not aware of the case and he surrendered before the Court andobtained bail on coming to know of the case. It is stated bythe petitioner that he was residing in Abu Dhabi for morethan 20 years and that he was undergoing medicaltreatments in Abu Dhabi under a health insurance cover. It isstated that as he had to go to Abu Dhabi for the purpose ofrenewing the said insurance cover and to completeformalities concerning the examinations of his children, hemoved the trial court seeking permission to go abroad, andin terms of Ext.P3 order, the trial court permitted him to goabroad for 45 days. It is stated by the petitioner that interms of the said order, the petitioner went abroad and cameback on 13.02.2018. It is also stated by the petitioner thatas he had an appointment in the Nephrology Department ofSheik Khalifa Medical City Hospital, Abu Dhabi in connectionwith the treatments for his renal ailments, he approachedthe trial court again for permission to go abroad and he waspermitted by the trial court to go abroad again in terms ofExt.P5 order. 3.In the meanwhile, Ext.P8 order was issued by the second respondent under Section 230 of the Act statingthat the petitioner is an assessee in default as understoodwithin the meaning of Section 220 of the Act; that theoutstanding liability of the petitioner in his individualcapacity is Rs. 22,66,713/-; that he has been held jointly andseverally liable for payment of tax and penalty demands ofthe company under Section 179 of the Act to the extent ofRs.408.6 Crores; that the petitioner has been evadingpayment of the outstanding demands; that he has not madeany satisfactory arrangements to clear the outstandingdemands and that therefore he shall not leave the territoryof India by land, sea or air unless he furnishes a TaxClearance Certificate to the effect that satisfactoryarrangements have been made by him for payment of histax dues. According to the petitioner, he is unable to goabroad in terms of Ext.P5 order on account of his inability toobtain Tax Clearance Certificate as directed in Ext.P8 order.As far as the personal liability of the petitioner mentioned inExt.P8 order is concerned, it is pointed out by the petitionerthat the orders, on the basis of which demand is raised : 4 : : 4 : against him, have been challenged by the petitioner inappeals and realisation of the amounts in terms of thedemand has been stayed. As far as the liability of thecompany mentioned in Ext.P8 order is concerned, it is statedby the petitioner that it is only from Ext.P8 order that hecame to know of Ext.P13 order making him also liable for thetax dues of the company under Section 179 of the Act.According to the petitioner, Ext.P13 order is illegal in asmuch as the same was one issued without notice to him. Onthe merits of the matter covered by Ext.P13 order, the caseof the petitioner is that he was the director of the companyonly till 01.10.2009 and liability has been fastened on him onthe premise that he was the director of the company till2016. The petitioner, therefore challenges Exts.P8 and P13orders in the writ petition on that basis. 4.A statement has been filed on behalf of therespondents. It is stated, among others, in the statementthat a notice was issued to the petitioner on 31/07/2017before issuing Ext.P13 order; that in terms of the said notice,the matter stood posted for hearing on 11/08/2017; that the A statement has been filed on behalf of the petitioner did not turn up for hearing on 11/08/2017 and thatit is in the said circumstances that Ext.P13 order was issuedon 14/08/2017. It is also stated by the respondents in thestatement that there was a search in the premises of thepetitioner as also in the premises of the company on27.03.2015 by the authorities under the Act; that thepetitioner left India immediately thereafter; that he did notco-operate in the assessment proceedings initiatedsubsequently and that the assessment proceedings inrespect of the petitioner as also that of the company for theperiods from 2009-10 to 2015-16, in the circumstances, hadto be completed with the materials available on record,determining the liability of the petitioner and the companyas indicated in Ext.P8 order. It is also pointed out in thestatement filed on behalf of the respondents that theassessee has not co-operated even with the Central Bureauof Investigation, who were investigating the case registeredagainst him; that the Central Bureau of Investigation, in thecircumstances, issued red corner notices through interpol forsecuring the presence of the petitioner in India and it is at : 6 : that point of time that the petitioner has come back to Indiaand surrendered before the Court. As regards the contentionof the petitioner that he was the director of the companyonly till 01/10/2009, it is stated that in the Form-20B filed bythe company with the Registrar of the Companies during2011, the petitioner is the managing director of the companywith 33.34% share holding. It is also stated by therespondents that Form-32 filed with the Registrar ofCompanies which is relied on by the petitioner tosubstantiate his case that he was the managing director ofthe Company only till 01/10/2009, is one filed by one RennyEapen, who is authorised by the Board of the company tosign and submit forms on behalf of the company only on27.01.2011. 5.Heard the learned Senior Counsel for thepetitioner as also the learned Standing Counsel for therespondents. 6.The learned Senior Counsel for the petitionercontended that when notice preceding Ext.P13 order wasissued, the petitioner was in judicial custody and therefore, : 7 : the notice in the said proceedings should have been servedon the petitioner through the Superintendent of the Jail.According to the learned Senior Counsel, in so far as the saidcourse was not adopted by the second respondent in thematter of passing Ext.P13 order, the same can be reckonedonly as an order passed without notice to the petitioner andhence liable to be struck down. It is also contended by thelearned Senior Counsel that since Ext.P8 order is issuedbased on Ext.P13 order, the same is also liable to be struckdown. 7. The learned Standing Counsel for the 6.The learned Senior Counsel for the petitionercontended that when notice preceding Ext.P13 order wasissued, the petitioner was in judicial custody and therefore, : 7 : the notice in the said proceedings should have been servedon the petitioner through the Superintendent of the Jail.According to the learned Senior Counsel, in so far as the saidcourse was not adopted by the second respondent in thematter of passing Ext.P13 order, the same can be reckonedonly as an order passed without notice to the petitioner andhence liable to be struck down. It is also contended by thelearned Senior Counsel that since Ext.P8 order is issuedbased on Ext.P13 order, the same is also liable to be struckdown. 7. The learned Standing Counsel for the respondents submitted that if persons like the petitioner arepermitted to go abroad, without making adequate provisionfor settlement of their tax liability, the Revenue may not beable to realise their tax dues running to crores. 8.I have given my thoughtful consideration tothe contentions raised by the parties. 9.The first proviso to sub-section (1A) of Section230 of the Act makes it clear that no person who is domiciledin India and in respect of whom circumstances exist, which in The first proviso to sub-section (1A) of Section : 8 : the opinion of the income-tax authority rendering itnecessary for such person to obtain a certificate under thesaid Section, shall leave the country unless he obtains acertificate from the income-tax authority stating that he hasno liabilities under the Act or that satisfactory arrangementshave been made for discharging the liability under the Act.It is in exercise of the power conferred under the first provisoto sub-section (1A) of Section 230 of the Act that the secondrespondent has issued Ext.P8 order. In the light of thevarious orders issued by the authorities under the Actagainst the petitioner in his personal capacity and in thelight of Ext.P13 order, the petitioner cannot dispute hisliability mentioned therein. The liability of the petitionermentioned in Ext.P8 order is more than 400 Crores. In thecircumstances, the second respondent cannot be found faultwith for having insisted Tax Clearance Certificate for thepetitioner to leave the country under the first proviso to sub-section (1A) of Section 230 of the Act. 10.The case of the petitioner as regards hispersonal liability mentioned in Ext.P8 order is that he : 9 : preferred appeals against all the orders, on the basis ofwhich demand is raised against him and the enforcement ofthe demand remains stayed in terms of the orders passedby the appellate authorities. Placing reliance on theinstructions issued by the Central Board of Direct Taxes on05.02.2004, the learned Senior Counsel for the petitionercontended that in so far as the enforcement of the demandraised against the petitioner in his personal capacity remainsstayed, in the light of the said instructions, the competentauthority under the Act cannot insist Tax ClearanceCertificate for the said liability. Exts.P11 and P19 are theorders of stay obtained by the petitioner in the appealspreferred against assessment and penalty orders imposed onthe petition in his personal capacity. The said orders areissued on 23.03.2018 and 27.03.2018 respectively. Thepetitioner cannot challenge Ext.P8 order issued on05.03.2018 on the basis of Exts.P11 and P19 orders issuedsubsequently. 11.Coming to the liability of the companymentioned in Ext.P8 order, as noted above, the petitioner 11.Coming to the liability of the companymentioned in Ext.P8 order, as noted above, the petitioner was made jointly and severally liable for the liability of thecompany in terms of Ext.P13 order. The case of thepetitioner is that the same is an order passed without noticeto him and as he ceased to be the director of the companywith effect from 01.10.2009, at any rate, there should nothave been an order against him for the liability of thecompany for the subsequent period. It is also the case of thepetitioner that even if it is assumed that he was the directorof the company all throughout, an order under Section 179of the Act should not have been passed without complianceof the provisions contained in the said section. According tothe petitioner, he is entitled to show that the non-recovery ofthe dues of the company cannot be attributed to any grossneglect, misfeasance or breach of duty on his part in relationto the affairs of the company and in that event, he cannot bemade jointly and severally liable for the dues of thecompany. According to the petitioner, in so far as Ext.P13order was passed without notice to the petitioner, he lost theopportunity to establish the said fact. 12.There cannot be any dispute to the fact that : 11 : an order under Section 179 of the Act cannot be passedwithout affording the parties concerned an opportunity ofhearing. The statement filed on behalf of the respondentsindicates that a notice was issued to the petitioner prior toExt.P13 order on 31/07/2017 directing him to appear forhearing on 11/08/2017. The specific case of the petitioner inthe writ petition is that he was remanded to judicial custodyon his appearance before the Criminal Court on 29/03/2017and he was released on bail only on 11/08/2017. This fact isnot seen disputed in the statement filed on behalf of therespondents. In so far as the petitioner was in jail whennotice was ordered in the proceedings initiated against himunder Section 179 of the Act, the said notice should havebeen served on him through the Superintendent of the jailwherein he was detained. The said course admittedly has notbeen adopted by the respondents. In the circumstances, Iam of the view that Ext.P13 order cannot be reckoned as oneissued in compliance with the principles of natural justice.Ext.P13 order, in the circumstances, is liable to be set asideand the matter has to be considered afresh. : 12 : 13.In so far as it is found that fresh orders needto be passed in the proceedings initiated against thepetitioner under Section 179 of the Act, it is for thecompetent authority under the Act to consider in the saidproceedings, the contentions raised by the petitioner asregards his liability to pay the tax arrears of the company. In the result, the writ petition is allowed in part asfollows: (i)Ext.P13 order is quashed and the secondrespondent is directed to pass fresh orders in theproceedings initiated against the petitioner under Section179 of the Act, after affording the petitioner an opportunityof hearing. This shall be done within six weeks. (ii)After the conclusion of the proceedings underSection 179 of the Act as directed, the second respondentshall consider whether an order under Section 230 of the Actis required to be issued against the petitioner, having regardto the order passed in the proceedings under Section 179 ofthe Act as also the interim orders obtained by the petitionerin the appeals preferred challenging the assessment and penalty orders against him, and issue a fresh order eitherconfirming Ext.P8 order or varying the same.This shall bedone within four weeks from the date of the order underSection 179 of the Act. Ext.P8 order will continue to be inforce until fresh orders are passed under Section 230 of theAct. rsr Sd/- P.B.SURESH KUMAR JUDGE