Validity of long-pending show cause notices and belated personal hearing notices challenged; court quashes late adjudication for unexplained delay

Challenge to validity of show cause notices issued in 19941997 and personal hearing notices issued in 2022 concerned administrative delay and propriety of retaining matters in the call book. Court relied on precedent addressing unlawful retention and concluded that none of the prescribed conditions justified call book placement, that the issue had attained finality earlier, and that unexplained prolonged inaction followed by swift adjudication rendered the SCNs and subsequent original order invalid. Consequence: impugned notices and the order arising from late adjudication were set aside and the application was allowed.

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Issues Involved:
1. Inordinate delay in adjudication of show cause notices.
2. Validity of transferring cases to the call book.
3. Judicial propriety and discipline in the context of pending writ applications.
4. Compliance with procedural fairness and natural justice.

Summary:

Inordinate Delay in Adjudication of Show Cause Notices:
The petitioners challenged the show cause notices (SCNs) issued between 1994 and 1997, and the subsequent personal hearing notices issued in 2022 after a lapse of about 27 to 29 years. The court noted the inordinate delay and quashed the SCNs and personal hearing notices, referencing a similar case (W.P.(T) No. 308 of 2023) where a 29-year delay was found contrary to Section 11A(11) of the Central Excise Act, 1944, leading to unreasonable and arbitrary results.

Validity of Transferring Cases to the Call Book:
The court examined the procedural aspects of transferring cases to the call book, referencing CBIC circulars and guidelines. It found that none of the conditions for transferring the cases to the call book were satisfied. The court highlighted the lack of justification for keeping the SCNs pending for 18 years after the issue had attained finality in 2004.

Judicial Propriety and Discipline:
The court criticized the respondent-Commissioner for passing the common Order in Original (OIO) just three days after the court's decision in W.P.(T) No. 308 of 2023, which quashed a similar SCN. The court emphasized that judicial propriety and discipline required the respondents to await the adjudication of the present writ applications, citing the case of Godrej Sara Lee Ltd. v. Excise & Taxation Officer.

Compliance with Procedural Fairness and Natural Justice:
The court underscored the importance of procedural fairness and natural justice, noting that the respondents' actions were unreasonable and violated these principles. The court referenced several judgments, including Eastern Agencies Aromatics Private Limited v. Union of India and GPI Textiles Limited v. Union of India, to support its stance on the necessity of timely adjudication and the adverse impact of undue delays on the petitioners.

Conclusion:
The court quashed the respective SCNs, notices of personal hearing, and the common Order in Original dated 17.02.2023. The writ applications were allowed, emphasizing the need for adherence to judicial propriety, procedural fairness, and timely adjudication in tax matters.

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