2022 (2) TMI 783 - HC - Central Excise

Court quashes 16-year-old Notice, upholds Petitioner's rights, stresses timely adjudication & transparency

The Bombay Dyeing and Manufacturing Company Limited Versus Deputy Commissioner of CGST & CX, Div-IX, Mumbai Central GST Commissioner

The Court quashed and set aside the Show Cause Notice dated 16 September 2005, ruling in favor of the Petitioner. The delay of 16 years in adjudicating ... Delay in adjudication of SCN - show-cause notice has not been adjudicated upon for about 16 years - HELD THAT:- Perusal of the records indicates that the Show Cause Notice was issued on 16 September 2005. A reply was filed by the Respondent. It is not in dispute that no notice of hearing on the said Show Cause Notice was issued to the Petitioner at any point of time. The Petitioner was not informed that the said Show Cause Notice was kept in call book as alleged in the affidavit-in-reply. There is no delay attributable on the part of the Petitioner in the affidavit-in-reply filed by the Respondent. This Court in case of PARLE INTERNATIONAL LIMITED VERSUS UNION OF INDIA AND OTHERS [2020 (11) TMI 842 - BOMBAY HIGH COURT] has dealt with the identical situation, where the Show Cause Notice was adjudicated upon after 13 years after the date of issuance. This Court after considering the judgments in the cases of SANGHVI RECONDITIONERS PVT. LTD. VERSUS UNION OF INDIA, THE COMMISSIONER OF CUSTOMS, AIR CARGO COMPLEX (IMPORT) , & THE ADDITIONAL DIRECTOR GENERAL, DRI [2017 (12) TMI 906 - BOMBAY HIGH COURT] where there was delay of 14 to 17 years in adjudicating the proceedings, this Court held that when the revenue keeps the show-cause notice in call book then it should inform the parties about the same - this Court in the said judgement held that when a show-cause notice is issued to a party, it is expected that the same would be taken to its logical consequences within a reasonable period so that a finality is reached. In this case, the show-cause notice has not been adjudicated upon for about 16 years. It is not expected from the assessee to preserve the evidence/record intact for such a long period to be produced at the time of hearing of the Show-Cause Notice. The Respondent having issued the Show-Cause notice, it is their duty to take the the said Show-Cause notice to its logical conclusion by adjudicating upon the said Show-Cause Notice within a reasonable period of time. In view of the the gross delay on the part of the Respondent, the Petitioner cannot be made to suffer - Hearing of Show-cause notice belatedly is in violation of natural justice. The Impugned Show-Cause Notice dated 16 September 2005 issued by the Respondent to the Petitioner, annexed as Exhibit ‘A’ to the Petitioner is quashed and set aside - petition allowed. Issues involved:Challenge to Show Cause Notice dated 16 September 2005 under Article 226 of the Constitution of India due to delay in adjudication.Analysis:The Petitioner challenged a Show Cause Notice dated 16 September 2005 under Article 226 of the Constitution of India, alleging that despite filing a reply within four weeks, there was no further communication from the Respondent for hearing or adjudication. The Petitioner contended that after 16 years, it was unfair for the Respondent to proceed with the Notice. Reference was made to a judgment in a similar case to support this argument.The Respondent, through their Counsel, argued that the stand taken by the Respondent was already stated in the affidavit-in-reply and that the Petitioner was not entitled to any relief based on those grounds. The Court noted that the Show Cause Notice was issued in 2005, and despite a reply from the Respondent, no notice of hearing was sent to the Petitioner. It was observed that the Petitioner was not informed that the Notice was kept in abeyance, as claimed by the Respondent.Citing a previous judgment, the Court emphasized that when a Show Cause Notice is kept pending, parties should be informed to safeguard their interests and ensure transparency in revenue administration. The Court held that the delay of 16 years in adjudicating the Notice was unreasonable and violated principles of natural justice. It was deemed unfair to expect the Petitioner to preserve evidence for such a prolonged period.The Court ultimately quashed and set aside the Show Cause Notice dated 16 September 2005, ruling in favor of the Petitioner. The judgment highlighted that the delay in hearing the Notice was unjust and against the principles of fairness. The Court's decision was in line with previous rulings on similar cases, emphasizing the importance of timely adjudication and transparency in administrative proceedings.