Authority upheld in jurisdictional matter, circular applies retroactively, petitioner to respond within 30 days

The court held that the respondent authorities had jurisdiction to issue the Demand-cum-Show-Cause Notice dated 31.12.2020 and that the Circular dated 11.11.2021 applied retrospectively. The petitioner was directed to submit a show cause reply within 30 days, with the adjudicating authority mandated to offer a hearing opportunity online or in person. The court emphasized that its ruling was confined to the jurisdictional matter and did not delve into the merits of the demand in the notice. The writ petition was disposed of accordingly.

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Issues Involved:
1. Validity of Demand-cum-Show-Cause Notice without pre-show cause notice consultation.
2. Applicability and retrospective effect of the Circular dated 11.11.2021.
3. Suppression of facts by the petitioner.
4. Legality and validity of the Corrigendum dated 21.02.2022.

Issue-wise Detailed Analysis:

1. Validity of Demand-cum-Show-Cause Notice without pre-show cause notice consultation:
The petitioner argued that the issuance of the Demand-cum-Show-Cause Notice dated 31.12.2020 without pre-show cause notice consultation violated Clause 5 of the Master Circular on Show Cause Notice, Adjudication, and Recovery dated 10.03.2017. The petitioner claimed that this omission rendered the notice without jurisdiction. However, the respondent countered that the Circular dated 11.11.2021, which clarified the pre-show cause notice consultation requirement, specified that it was not mandatory in cases involving fraud, collusion, willful mis-statement, suppression of facts, or contravention of provisions with intent to evade payment of duties or taxes.

2. Applicability and retrospective effect of the Circular dated 11.11.2021:
The court examined whether the Circular dated 11.11.2021 was clarificatory in nature and thus applicable retrospectively. The Circular reiterated that pre-show cause notice consultation was not mandatory for cases involving suppression of facts. The court concluded that the Circular was indeed clarificatory and should be considered to operate retrospectively from the date of the Board’s instructions dated 21.12.2015 and the Master Circular dated 10.03.2017. Consequently, the court held that the respondent authorities were not mandated to have a pre-show cause notice consultation in the petitioner’s case, as it involved allegations of suppression of facts.

3. Suppression of facts by the petitioner:
The petitioner argued that the issuance of a second show cause notice on similar facts and allegations as the first notice (dated 08.12.2016) could not be considered suppression of facts, citing the Supreme Court judgment in Nizam Sugar Factory vs. Collector of Central Excise, A.P. The court, however, refrained from delving into whether there was suppression of facts, as it was beyond the scope of determining the jurisdiction of the Demand-cum-Show-Cause Notice at this stage.

4. Legality and validity of the Corrigendum dated 21.02.2022:
The petitioner challenged the Corrigendum that reassigned the adjudicating authority to Aizawl, arguing it would be difficult to attend hearings there. The court noted that the petitioner was given the option to appear for personal hearings either online or physically. The court found no reason to interfere with the administrative decision to change the adjudicating authority and upheld the Corrigendum.

Conclusion:
The court concluded that the respondent authorities had the jurisdiction to issue the Demand-cum-Show-Cause Notice dated 31.12.2020 and that the Circular dated 11.11.2021 applied retrospectively. The court directed the petitioner to submit a show cause reply within 30 days and mandated the adjudicating authority to offer a hearing opportunity either online or in person. The court clarified that its observations were limited to the jurisdictional issue and did not address the merits of the demand in the show cause notice. The writ petition was disposed of with these directions.

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