High Court of Bombay

Parle International Ltd vs Union Of India and Ors.

MANU/MH/1965/2020

26.11.2020

Excise

Adjudication of show cause notices issued more than a decade ago is illegal

Present is a petition under Articles 226 / 227 of the Constitution of India, 1950, the writ petition was filed seeking a direction to the Respondents for a declaration that adjudication of the show-cause notices dated 1st June, 2006 and 28th November, 2006 after 13 years is illegal, void and bad in law and on that ground to quash the said show-cause notices. The Petitioner is a private limited company incorporated under the Companies Act, 1956 and is engaged in the business of manufacture of excisable goods.

Question for consideration is whether in the facts and circumstances of the case, such delayed adjudication of the show-cause notices would be just, proper and legal.

The Revenue/Department has not been able to justify its lapse in not adjudicating the show-cause notice issued on 28th March, 2002 for more than 15 years. There may be reasons enough for the Revenue to retain some matters like this in the call book, but those reasons do not find any support in law insofar as the present Petitioner's case is concerned.

A show-cause notice issued a decade back should not be allowed to be adjudicated upon by the revenue merely because there is no period of limitation prescribed in the statute to complete such proceedings. Larger public interest requires that revenue should adjudicate the show-cause notice expeditiously and within a reasonable period. What would be the reasonable period would depend upon the facts and circumstances of each case but certainly a period of 13 years cannot be termed as a reasonable period. Regarding keeping the show-cause notice in the dormant list or the call book, this Court held that such a plea cannot be allowed or condoned by the writ court to justify inordinate delay at the hands of the revenue.

In the present case, it is evident that, the delay in adjudication of the show-cause notices could not be attributed to the petitioner. The delay occurred at the hands of the Respondents. An Action which is unfair and in violation of the principles of natural justice cannot be sustained. Sudden resurrection of the show-cause notices after 13 years, therefore, cannot be justified. When the commencement of adjudication proceedings after inordinate delay of 13 years post-issuance of show-cause notices and submission of reply is held to be untenable in law, any consequential decision or order based on such delayed adjudication would also be rendered invalid.

The Respondents were not justified in commencing adjudication proceeding 13 years after issuance of the show-cause notices dated 1st June, 2006 and 28th November, 2006. Such adjudication proceeding is therefore, held to be invalid. Consequently, impugned order-in-original is accordingly set aside. Writ petition is allowed.

Tags : SCN Adjudication Bar

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