The Bombay High Court on Monday quashed a show-cause notice issued in 2005 to Bombay Dyeing and Manufacturing Company Limited by the Central Excise authorities [Bombay Dyeing and Manufacturing Company Limited v. Deputy Commissioner of CGST].
Justices RD Dhanuka and SM Modak remarked that the assessee cannot be expected to preserve evidence for this long a time and then produce it for hearing.
“The Respondent having issued the Show-Cause notice, it is their duty to take the the said show-cause notice to its logical conclusion by adjudicating upon the said show-cause notice within a reasonable period of time. In view of the gross delay on the part of the Respondent, the Petitioner cannot be made to suffer … Hearing of show-cause notice belatedly is in violation of natural justice,” the Court’s order said.
The petition under Article 226 of the Constitution was filed by Bombay Dyeing when the 16-year-old notice was finally taken up for adjudication.
Counsel for the petitioner submitted that they were never informed of the said notice being kept in the call book after their prompt reply upon receiving the same.
The respondent’s counsel did not contest this contention.
The petitioner relied on Parle International Ltd. Vs. Union of India to argue that the respondent cannot be allowed to proceed with the notice after such a long period of time.
The High Court recollected that in the Parle case, it had held that when the revenue department keeps the show-cause notice in the call book, it should inform the parties about the same to serve two purposes:
- It puts the party to notice that the show cause notice is still alive and is only kept in abeyance. This would enable the party concerned to safeguard the evidence till the show-cause notice is taken up for adjudication.
- If the notices are kept in call book, the parties gets an opportunity to point out to the revenue that the reasons for keeping it in call book are not correct and that the notices should be adjudicated promptly.
“The law laid down by the Division Bench of this Court in the case of Parle International Limited (supra), applies to the facts of this case. We do not propose to take any different view in the matter,” the Bench said.
It, therefore, quashed and set aside the 2005 notice.
Source from: https://www.barandbench.com/news/bombay-high-court-quashes-16-year-old-show-cause-notice-issued-to-bombay-dyeing