Show cause notice requirement defeats penalty order issued without prior notice under APVAT Act

A penalty order under the APVAT Act, 2005 could not be sustained because it was passed without issuing a show cause notice, and that defect was accepted. The High Court had quashed the penalty on that basis, and the Supreme Court found no ground to interfere. It also noted that, if otherwise permissible in law, the revenue could still initiate fresh proceedings by issuing a proper show cause notice.

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Issues: Whether a penalty order passed under the APVAT Act, 2005 without issuing a show cause notice could be sustained.

Analysis: The order of penalty was passed without any show cause notice, and that defect was acknowledged. The High Court had quashed the penalty order on that ground. The challenge before the Court did not disclose any basis to interfere with that conclusion. The Court also noted that, if permissible in law, the revenue could still proceed afresh by issuing a proper show cause notice.

Conclusion: The penalty order could not be sustained in the absence of a show cause notice, and the challenge was rejected.

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