Court postpones final decision on challenging payment without show cause notice under Finance Act, 1994. Petitioners claim duress.

The Court postponed the final decision in a case challenging the action of compelling payment without issuing a show cause notice under the Finance Act, 1994. The Petitioners argue that the reversal of Cenvat Credit was done under duress, while the Respondents deny issuing arrest threats. Despite the Respondents' claim of issuing a show cause notice, the Court was not convinced and granted them additional time to prepare. The matter is scheduled for final hearing on 30th July 2019.

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Issues:
Challenge to action of compelling payment before issuance of show cause notice under Finance Act, 1994.

Analysis:
The petition under Article 226 challenges the Respondents' action of compelling the Petitioners to pay Rs. 11.25 crores by reversing Cenvat Credit without issuing a show cause notice under the Finance Act, 1994. The Petitioners argue that the amount was reversed due to threats of arrest during investigation, despite legal opinions stating such arrests are impermissible. They rely on legal precedents to assert that such strongarm tactics by Revenue officers are unlawful and subvert the rule of law. The Petitioners were coerced to reverse the credit without any show cause notice being issued or adjudicated upon.

Analysis:
The Respondents, represented by Mr. Kantharia, deny issuing any arrest threats to the Petitioners, as stated in an officer's affidavit. They claim a show cause notice has been issued, and therefore, no further orders should be passed. Despite this, the Court is unimpressed with the Respondents' submissions and was inclined to pass a final order. However, Mr. Kantharia requested additional time to prepare better, leading to a postponement of the final decision. The Court grants time at the Revenue's request but schedules the matter for final hearing on 30th July 2019.

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