Case Note & Summary
The Bombay High Court, in a writ petition under Article 226 of the Constitution of India, quashed a show cause notice issued by the Deputy Commissioner of CGST & CX to The Bombay Dyeing and Manufacturing Company Limited. The notice was issued on 16 September 2005 under the Central Excise Act, 1944. The petitioner filed a detailed reply within four weeks of receiving the notice but received no further communication or hearing from the Revenue for over 16 years. The petitioner then approached the High Court seeking quashing of the notice on the ground of inordinate delay. The Revenue, in its affidavit-in-reply, claimed that the notice was kept in a call book but admitted that the petitioner was not informed of this. The court noted that there was no delay attributable to the petitioner and that the Revenue had not provided any explanation for the prolonged inaction. Relying on the unreported judgment in Parle International Ltd. v. Union of India (W.P. No.12904 of 2019, decided on 26.11.2020), where a similar delay of 13 years was held to be fatal, the court held that allowing the Revenue to proceed after 16 years would be unjust and violative of principles of natural justice. The court quashed the show cause notice and disposed of the petition. The judgment was delivered by a division bench comprising Justices R.D. Dhanuka and S.M. Modak on 14 February 2022.
Headnote
A) Constitutional Law - Article 226 - Quashing of Show Cause Notice - Inordinate Delay - The petitioner challenged a show cause notice issued on 16 September 2005 under the Central Excise Act, 1944. The petitioner filed a reply within four weeks but received no further communication or hearing for over 16 years. The Revenue contended that the notice was kept in a call book but failed to inform the petitioner. Held that the Revenue cannot be allowed to proceed with the show cause notice after such an inordinate and unexplained delay, as it would be unfair and violative of principles of natural justice. The notice was quashed. (Paras 3-9) B) Central Excise - Show Cause Notice - Delay in Adjudication - Reliance on Parle International Ltd. v. Union of India - The court followed the unreported judgment in Parle International Ltd. v. Union of India (W.P. No.12904 of 2019, decided on 26.11.2020), where a show cause notice was adjudicated after 13 years. Held that the same principle applies here, and the delay of 16 years is even more egregious. (Paras 5, 8-9)
Issue of Consideration
Whether a show cause notice issued in 2005 can be adjudicated after more than 16 years without any explanation for the delay and without any notice of hearing to the petitioner.
Final Decision
The show cause notice dated 16 September 2005 is quashed. The writ petition is disposed of. Rule is made absolute accordingly.
Law Points
- Inordinate delay in adjudication of show cause notice
- principles of natural justice
- quashing of show cause notice due to unexplained delay
- reliance on Parle International Ltd. v. Union of India
