The Bombay High Court has declared that customs penalty proceedings initiated against a company director abated following his death. The Customs Department did not dispute the legal position before the Court.
The bench of Justice Suman Shyam and Justice Advait M. Sethna passed the order in a writ petition concerning a personal penalty imposed upon the deceased, one of the directors of the JPM Group of Companies.
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The petition was filed by the petitioner against the Commissioner of Customs, Mumbai. The petitioner challenged the continuation of the penalty imposed upon his father, who died on March 16, 2016.
Appearing for the petitioner, counsel submitted that the impugned penalty had been imposed personally upon Jiten P. Mody in his capacity as a director. Since he had died, the proceedings could no longer continue and had abated in law.
The petitioner relied upon the Supreme Court’s ruling in Shabina Abraham & Others v. Collector of Central Excise & Customs, reported in (2015) 10 SCC 770. Reliance was also placed on the Madras High Court decision in S. Hidayathulla @ Mannady Bharakath (Deceased) & Others v. Commissioner of Customs.
The Customs Department’s counsel did not dispute the petitioner’s submission. The Department also confirmed that the penalty proceedings had abated because the person against whom they were initiated had died.
Considering the undisputed position, the High Court declared that the proceedings initiated against the deceased in his capacity as a company director had abated. The writ petition was accordingly disposed of.
The Court’s ruling was confined to the personal penalty proceedings against the deceased director. It did not examine any separate liability of the company or other monetary claims.
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