VCES show cause notice limitation made rejection of the declaration unsustainable when the prescribed time limit was not met.

VCES declarations had to be processed in strict compliance with the Board circular requiring a show cause notice within 30 days from filing of the declaration or from the circular date, whichever was later. Where the notice was handed over to the postal authorities after expiry of that prescribed period, the initiation of proceedings to reject the declaration was time-barred. The consequence was that the rejection could not be sustained.

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Issues: Whether the show cause notice issued for rejection of the VCES declaration was barred by limitation and whether the rejection of the declaration could be sustained.

Analysis: The declaration under the Voluntary Compliance Encouragement Scheme was required to be dealt with in accordance with the Board circular prescribing issuance of a show cause notice within 30 days from the date of filing of the declaration or the circular, whichever was later. The notice in this case was handed over to the postal authorities beyond the prescribed period. The time limit for initiating proceedings to reject the declaration had to be strictly complied with, and non-observance of that condition rendered the proceedings unsustainable.

Conclusion: The rejection of the VCES declaration was barred by limitation and could not be sustained.

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