Pre-show cause consultation required before fiscal notice; proceedings were remitted for consultation and exemption merits left open.

In a fiscal dispute, the High Court held that the impugned proceedings could be set aside and the parties restored to the pre-show cause consultation stage where prior consultation had not been undertaken before issuance of the proposed notice. Relying on the departmental master circular requiring consultation before a show cause notice, the Court followed the same procedural course adopted in a similar matter and remitted the matter for consultation. The merits of the claimed exemption were left open and not adjudicated. Any fresh show cause notice issued after consultation would not be barred by limitation.

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Issues: Whether the impugned proceedings were liable to be set aside and the parties relegated to the stage of pre-show cause consultation before issuance of a show cause notice.

Analysis: The dispute arose in a fiscal setting where the petitioner complained that no prior consultation was undertaken before the order and proposed notice. The Court noted reliance on the departmental master circular prescribing consultation before issuance of a show cause notice and followed the course adopted in a similar matter, namely restoration of the matter to the stage preceding issuance of notice so that consultation could be carried out. The merits of the claimed exemption were expressly left open and were not adjudicated.

Conclusion: The matter was relegated to the consultation stage, and the writ petition was allowed on that basis. Any fresh show cause notice, if required after consultation, would not be barred by limitation.

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