Jurisdictional defects in show cause notices: absence of allegations on handling goods and knowledge rendered the notices unsustainable.

Section 9(1)(bbb) of the Central Excises and Salt Act, 1944 read with Rule 209A requires allegations that the person possessed or otherwise dealt with excisable goods and did so with knowledge or reason to believe that the goods were liable to confiscation. The show cause notices issued to the auditors were defective because they did not set out the necessary particulars showing that the auditors had handled the goods in the manner contemplated or that the knowledge element was established. A notice must stand on its own allegations and cannot be cured by an additional affidavit. On that basis, the notices were treated as without jurisdiction and quashed.

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Issues: Whether the show cause notices issued to the auditors under Section 9(1)(bbb) of the Central Excises and Salt Act, 1944 read with Rule 209A of the Central Excise Rules were without jurisdiction and liable to be quashed.

Analysis: The statutory provisions require a person to have acquired possession of, or otherwise dealt with, excisable goods, and to have done so with knowledge or reason to believe that the goods were liable to confiscation. The notices did not allege, with the necessary particulars, that the auditors had themselves handled the excisable goods in the manner contemplated by the provisions, nor did they disclose facts establishing the essential ingredient of knowledge or reason to believe. A show cause notice must stand or fall on the allegations made in it and cannot be cured by an additional affidavit. In these circumstances, the notices did not disclose a prima facie case and were treated as lacking jurisdiction.

Conclusion: The show cause notices were held to be non est and were quashed.

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