Deputy Commissioner of CGST can’t issue a Show Cause Notice and sit over it for 16 years: Bombay HC quashes SCN against Bombay Dyeing
The Bombay High Court has recently came fuming on Deputy GST Commissioner and quashed a 2005 show cause notice issued to Bombay Dyeing and Manufacturing Company Limited by the Central Goods and Services Tax (CGST) authorities.
The company had approached the High Court in 2021 against the notice being kept alive.
Background
The Petitioner has filed reply to the Show Cause Notice within four weeks from the date of receipt of the said notice and did not get any further communication from the Respondent for hearing or any adjudication upon the said Show Cause Notice from the Respondent till today. The Petitioner has thus filed this Petition.
Mr. Patkar, Counsel appearing for the Petitioner invited our attention to the said Show Cause Notice and also to the averments made by the Respondents, more particularly, paragraph-5 of the Affidavit-in-Reply dated 27 August 2021.
He submitted that the Petitioner was never informed that the said Show Cause Notice was kept in the call book at any point of time. He submits that the Respondent cannot be allowed to proceed with the Show Cause Notice after more than 16 years.
In support of this submission, Counsel relied upon the unreported judgement in the case of Parle International Ltd. Vs. Union of India1 dated 26 November 2020 in Writ Petition No.12904 of 2019.
Mr. Kantharia,learned Counsel appearing for the Revenue states that the stand taken by the Respondent is already set out in the affidavit-in-reply filed by the Respondent and on those grounds, the Petitioner is not entitled to seek any relief.
Court’s Observation
Justices RD Dhanuka and SM Modak has remarked that when a show-cause notice is issued to a party, it is expected that the same would be taken to its logical consequences within a reasonable period so that a finality is reached. In this case, the show-cause notice has not been adjudicated upon for about 16 years.
“We have perused the affidavit-in-reply filed by the Respondent. In the affidavit-in-reply, the Respondent does not allege that the Petitioner was informed about the show-cause notice having been kept in call book as sought to be alleged in the affidavit-in-reply filed by the Respondent. If the Respondent would have informed the Petitioner about the said Show-Cause Notice in the year 2005 itself, having been kept in call book, the Petitioner would have immediately applied for appropriate reliefs by filing the appropriate proceedings,” the court observed.
It is not expected from the assessee to preserve the evidence/record intact for such a long period to be produced at the time of hearing of the Show-Cause Notice. The Respondent having issued the Show-Cause notice, it is their duty to take 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.
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. Hearing of Show-cause notice belatedly is in violation of natural justice.
Finally, the ruled that the Impugned Show-Cause Notice dated 16 September 2005 issued by the Respondent to the Petitioner, annexed as Exhibit ‘A’ to the Petitioner is quashed and set aside. The Writ Petition is allowed in terms of prayer clause- (a) of the Petition. Accordingly, Rule is made absolute,” the court
