Pre-show cause consultation must be meaningful; notice issued by a different authority warrants corrective remand.

A Board-created pre-show cause consultation procedure, though not statutory, must be given meaningful effect once adopted to promote compliance and reduce avoidable notices. Where the taxpayer has participated in consultation, a show cause notice issued by a different commissionerate without any reference to that exercise is contrary to the Board's instructions and the principle that the authority that hears should ordinarily decide. The appropriate corrective response is not automatic interdiction of the notice, but remand for issuance of a fresh notice that fairly records the consultation stage, followed by reply, hearing, and adjudication in accordance with law.

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Issues: Whether the show cause notice was liable to be interfered with on the ground that the pre-show cause consultation procedure, as evolved by the Central Board, was not meaningfully followed and the notice was issued by a different authority; and what consequential relief should follow.

Analysis: The process of pre-consultation, though not a statutory mandate, was treated as a Board-created procedure intended to promote compliance, facilitate trade, and reduce avoidable show cause notices. Once such a procedure is adopted, it must be given meaningful effect. The appellant had been invited to consultation and had participated, but the show cause notice was issued by a different commissionerate instead of the authority that had conducted the consultation. The notice also did not refer to the pre-consultation exercise. The Court held that this was contrary to the Board's instructions and to the principle that the authority that hears should ordinarily decide. At the same time, the Court found that the notice need not be interdicted merely on that ground, but the defect required corrective action by way of a fresh notice with an appropriate reference to the consultation process.

Conclusion: The appellant succeeded to the extent that the impugned order was set aside and the matter was sent back for issuance of a fresh show cause notice with a brief discussion of the pre-consultation stage, followed by reply, hearing, and adjudication in accordance with law.

Ratio Decidendi: When the revenue adopts a pre-show cause consultation mechanism to balance compliance and adjudication, the procedure must be meaningful and the authority conducting the consultation should ordinarily be the authority issuing and adjudicating the notice; omission to reflect the consultation in the notice warrants corrective remand.

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