Court sets aside Order-in-Original due to delays and procedural lapses

The Court ruled in favor of the petitioner, setting aside the Order-in-Original and the show cause notice due to significant delays in adjudication and procedural lapses in serving notices for personal hearings. The Court emphasized that the delay without justification rendered the proceedings unlawful and arbitrary, breaching principles of natural justice. Consequently, the impugned order was deemed unreasonable, leading to its quashing with no order as to costs.

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Issues: Delay in adjudication of show cause notice, Breach of principles of natural justice, Quashing of Order-in-Original

Delay in Adjudication of Show Cause Notice:
The petitioner challenged the Order-in-Original issued after a significant delay of nearly eleven years from the issuance of the show cause notice. The Department contended that the alternative remedy was available and there was no breach of principles of natural justice. However, the Court noted that the show cause notice was issued in 2006 but remained dormant for several years without conclusion. The Department failed to explain the delay in adjudication, and the petitioner was not responsible for the delay. The Court emphasized that adjudication proceedings must conclude within a reasonable time, and the delay without justification rendered the proceedings unlawful and arbitrary. Citing previous decisions, the Court held that the delay in adjudication vitiated the show cause notice and the subsequent Order-in-Original.

Breach of Principles of Natural Justice:
The petitioner argued that there was a breach of principles of natural justice as notices for personal hearings were not served as prescribed under the Central Excise Act. The Department claimed to have issued notices, but the petitioner disputed their service. The Court found that the order impugned was vitiated due to the lack of adherence to procedural requirements, specifically in issuing notices for personal hearings. The Court held that the absence of proper notice and procedural irregularities further supported the quashing of the Order-in-Original.

Quashing of Order-in-Original:
Considering the delay in adjudication and the procedural lapses in serving notices for personal hearings, the Court allowed the petition and quashed the Order-in-Original along with the show cause notice. The Court emphasized that the delay in adjudication proceedings, without proper justification, rendered the impugned order unreasonable and arbitrary. Consequently, the Court ruled in favor of the petitioner, setting aside the Order-in-Original and the show cause notice, with no order as to costs.

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