Mandatory pre-show-cause consultation required before high-pitch demand notices; notice set aside for breach of natural justice.

A show-cause-cum-demand notice was liable to be set aside because the binding circular required mandatory pre-show-cause notice consultation for high-pitch demands above the specified threshold. The record did not show that the request for adjournment or additional time was considered, nor that any decision on the consultation hearing was communicated before issuance of the notice. Issuing the notice without effective consultation therefore breached the circular and violated the principles of natural justice. The matter was directed to be taken up afresh by issuing a fresh notice for pre-show-cause notice consultation in accordance with law.

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Issues: Whether the show-cause-cum-demand notice was liable to be set aside for non-compliance with the mandatory pre-show-cause notice consultation and consequent denial of hearing.

Analysis: The circular governing high-pitch demands above the specified monetary threshold made pre-show-cause notice consultation mandatory. The record did not show that the petitioner's request for adjournment or time was considered, nor that any decision on the consultation hearing was communicated before issuance of the impugned notice. In these circumstances, the issuance of the notice without effective consultation amounted to violation of the binding circular and the principles of natural justice.

Conclusion: The impugned show-cause-cum-demand notice was liable to be set aside and the matter was required to be taken up afresh by issuing a fresh notice for pre-show-cause notice consultation in accordance with law.

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