2014 (9) TMI 800 - HC - Customs

Validity of SCN - Non application of mind - contents of the show cause notice disclose a pre-conceived and closed mind - Held that - any useful purpose would not be served in asking the petitioner to submit a reply to the show cause notice. At the stage of show cause notice, the first respondent should only have an open mind. If his mind is closed with predetermined conclusions, the requirement of giving an opportunity to show cause becomes nugatory. In SBQ Steels Ltd., Vs. Commissioner of Customs, Central Excise and Sales Tax, Guntur reported in 2013 (1) TMI 359 - ANDHRA PRADESH HIGH COURT a Division Bench of Andhra Pradesh High Court took exception even to use of the words it is clear in the show cause notice. Therefore, the impugned show cause notice is liable to be set aside - It is open to the first respondent to issue a fresh show cause notice, keeping the object of issuing show cause notice in mind. - Decided in favour of assessee.

Summary

Issues:
Challenge to show cause notice under Regulation 20(1) of Customs Brokers Licensing Regulations, 2013.

Analysis:
The petitioner challenged the show cause notice, arguing that it displayed a pre-conceived and closed mind. The notice detailed the investigation and evidence until paragraph 7, but from paragraph 9 onwards, the first respondent made categorical findings, leaving no room for the petitioner to explain. The notice even stated in paragraph 14 that a prima facie case existed against the petitioner, potentially harming revenue interests. The court emphasized that a show cause notice should maintain an open mind, and if conclusions are predetermined, providing an opportunity to respond becomes meaningless. Citing a relevant case, the court highlighted that even phrases like "it is clear" in a notice were criticized. Consequently, the court set aside the show cause notice, allowing the first respondent to issue a fresh notice with the proper objective in mind. The writ petition was allowed, and no costs were imposed.