TaxTMI 
TaxTMI 
2010 (7) TMI 1000
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....itions is a show cause notice dated 21.01.2010 issued by the adjudicating authority namely the 1st respondent herein. 2. Petitioner in W.P. No: 15059 of 2010 is the Managing Director of the Company by name M/s. Helios and Matheson Information Technology Ltd., a Public Limited Company, hereinafter referred to as "H & M.I.T.L.", and the petitioner in W.P. No: 15060 of 2010 is the former Chairman of the said Company. It is petitioners' case that the contravention alleged to have been committed by the petitioner in furnishing the bank guarantee to a non resident was on the ground of applicability of Section 6 (3) (1) (J) of the Foreign Exchange Management Act, hereinafter referred to as FEMA, is not sustainable in law and the iss....
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....dure prescribed by the Government of India in Press Note No: 9 of 99 under which foreign companies will have to bring the requisite funds from abroad and not leverage the same from the funds from the domestic market. 3. While that being so, Moksha, Mauritius, in order to remit US $ 13.5 million equivalent to ₹ 58,37,75,195/- being the consideration for the allotment of preference shares of the petitioner, availed credit facilities from the State Bank of Mauritius at Mauritius. In order to comply with the terms of the share purchase agreement, petitioners gave a letter of lien and guarantee by both Mr. G.K.Muralikrishna and Mr. V. Ramachandran in favour of Chennai Branch of State Bank of Mauritius. The entire sum of ₹ 58,37,75,1....
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.... for the retransmission of the amount which would be credited to its account at Chennai have already been done and again on 15.12.2008 by way of another representation, a clarification was made. Then it was brought to the notice of the respondents that the Provisions of Section 6 (2) of FEMA is alone applicable. 5. While that being so, the respondents, without considering the representations made by the petitioners, proceeded further based on the complaint made by Rajeev Sawhney and called upon the petitioners to explain the charges framed vide its letter dated 21.01.2010. Through various representations, petitioners sought for certain documents including those documents seized by the respondents from petitioner's office. But, by a let....
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....the provisions of Section 6 (3) (j) of FEMA is not applicable to the petitioners and that, the show cause notice issued is in contravention of the said provisions of the Act. Learned counsel for the petitioners would also add that the respondents have not responded to the request of the petitioners to return the documents seized by them from H & M.I.T.L. Office or furnished xerox copies inspite of several requests made. According to the learned counsel, by this act of the respondents which compelled the petitioners to submit their explanation only with the available records, the respondents have violated the principles of natural justice and hence, this Court has to interfere with the impugned proceedings though it is only a show cause noti....
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....9;ble Supreme Court in the case of Special Director vs. Mohd. Ghulam Ghouse, reported in A.I.R. 2004 Supreme Court 1467 wherein the Supreme Court held that, "5. This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petitions questioning the legality of the show cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless the High Court is satisfied that the show cause notice was totally non est in the eye of law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine and th....