2021 (6) TMI 297 - HC - VAT and Sales Tax

Maintainability of petition - time limitation - primary contention of the petitioner is that prior to issuance of show-cause notice, the petitioner is entitled for consultation with the Noticee before issuance of show-cause notice in terms of the Circular No.1053/02/2017-CX dated 10.03.2017 - HELD THAT - The proceedings being at the preliminary stage be concluded at the earliest and also the submission of the learned counsel for revenue that they would not take any coercive steps till adjudication is completed, it would be appropriate to dispose off the matter in the stated manner in order to avoid any procrastination of the proceedings which are at nascent stage. It is made clear that the order passed would not be a precedent to be followed in other matters, while noticing the peculiar facts and contentions raised in the petition and that the order is passed without adverting to the merits of the contention of either parties - It would be appropriate that the show-cause notice dated 22.04.2021 be kept in abeyance. The petitioner in the interrugnum would be afforded an opportunity of personal hearing in terms of the Circular dated 10.03.2017. Petition disposed off.

Summary

Issues:
Challenge to show-cause notice validity, entitlement to consultation before issuance of notice, interpretation of Circular No. 1053/02/2017-CX, decision on keeping show-cause notice in abeyance, requirement for personal hearing, cooperation for expeditious disposal of proceedings.

Analysis:

The petitioner challenged the show-cause notice dated 22.04.2021, claiming it to be void, illegal, time-barred, beyond authority, and unconstitutional. The primary contention was the entitlement to consultation with the Noticee before the issuance of the notice, as per Circular No.1053/02/2017-CX dated 10.03.2017. The petitioner argued that they fulfilled the eligibility criteria for availing this benefit.

The revenue's counsel contended that the circular's benefit is subject to specific conditions, particularly when the show-cause notice pertains to "Preventive/offences relating to SCN's." The revenue's counsel stated that no grounds justified interference with the show-cause notice. However, they assured that the petitioner would have a hearing opportunity post the notice and no coercive steps would be taken until adjudication is completed.

Considering the preliminary stage of the proceedings and the assurance from the revenue's counsel regarding no coercive actions until adjudication, the court decided to keep the show-cause notice in abeyance. The petitioner was granted a personal hearing as per the Circular dated 10.03.2017, to be conducted by the Show-cause notice issuing authority. If, after the hearing, the authority decides to revive the notice, a new notice would be issued as if it were the original one. The order clarified that it does not set a precedent for future cases and was made without delving into the merits of the arguments from either party.

The petitioner was directed to appear before the Show-cause Notice Issuing Authority on a specified date. Cooperation with the authorities for the speedy resolution of the proceedings was emphasized. The court disposed of the petition, leaving all contentions open for future adjudication, highlighting the importance of cooperation for the efficient conclusion of the matter.