2022 (7) TMI 766 - HC - Central Excise

Validity of SCN - Respondent No.2 has not considered the orders passed by the Additional Commissioner of Central Excise and Commissioner of Central Excise where they have taken a contrary view - adjudication has been made more than 20 years after the show cause notices were issued and therefore, as held by various courts, these are stale notices - HELD THAT - In this case, Respondent No.2 has conveniently failed and neglected to even refer to the orders passed by its superior officers where contrary view has been taken. Respondent No.2 has also conveniently not dealt with the submissions of petitioner that delayed adjudication defeats very purpose of issuing the show cause notices. We would be justified for taking a view that Respondent No.2 chose to not deal with these submissions of petitioner because it was inconvenient to Respondent No.2 and he could not have taken a view otherwise. It makes no sense in making a party to pursue an appeal against order passed disposing show cause notices that were issued 20 years ago. Petition disposed off.

Summary

Issues Involved:

1. Consideration of contrary views by superior officers.
2. Staleness of show cause notices due to delayed adjudication.
3. Validity and legality of delayed adjudication orders.
4. Jurisdiction under Article 226 of the Constitution of India.

Issue-Wise Detailed Analysis:

1. Consideration of Contrary Views by Superior Officers:
The petitioner argued that Respondent No.2 failed to consider the orders passed by the Additional Commissioner and the Commissioner of Central Excise, which had taken a contrary view to the impugned order. The court noted that Respondent No.2 did not address these prior orders in the impugned decision. This omission was significant because the superior officers' decisions should have been considered to ensure consistency and fairness in adjudication.

2. Staleness of Show Cause Notices Due to Delayed Adjudication:
The petitioner contended that the show cause notices had become stale due to an inordinate delay of over 20 years in adjudication. The court referenced multiple precedents, including the case of Parle International Ltd. vs. Union of India, which held that delayed adjudication defeats the purpose of issuing show cause notices. The court emphasized that an assessee must know their standing within a reasonable period after a show cause notice is issued and a reply is submitted. The delay in this case was attributed to the respondents, not the petitioner, making the notices stale and procedurally unfair.

3. Validity and Legality of Delayed Adjudication Orders:
The court examined whether the delayed adjudication was just, proper, and legal. It cited previous judgments, such as Bhagwan S. Tolani Vs. B. C. Agrawal, which ruled that reopening stale matters causes serious detriment and prejudice to the petitioner. The court reiterated that adjudication should occur within a reasonable period, and delays of 13 to 17 years were deemed unreasonable in similar cases. This principle was supported by the consistent view of the court in subsequent cases, emphasizing that delayed adjudication violates natural justice and procedural fairness.

4. Jurisdiction Under Article 226 of the Constitution of India:
The court decided to exercise its jurisdiction under Article 226, despite the petitioner having filed an appeal against the impugned order. The court reasoned that the petitioner might not receive complete justice through the appeal process due to the blatant disregard of previous contrary orders and the unreasonable delay in adjudication. The court found it appropriate to intervene to ensure fairness and uphold the principles of natural justice.

Conclusion:
The court allowed the petition and set aside the impugned order dated 11th November 2020, recognizing the significant procedural lapses and the unreasonable delay in adjudication. The petitioner was directed to withdraw the appeal within two weeks, and the petition was disposed of with no order as to costs.