Bombay High Court
Godrej And Boyce Mfg Co Ltd vs Union Of India And 2 Ors on 5 August, 2022
Author: K. R. Shriram
Bench: K. R. Shriram
spm 1 J-WPL-21447-2022.doc
Digitally IN THE HIGH COURT OF JUDICATURE AT BOMBAY
signed by
MULEY
MULEY SHUBHAM
SHUBHAM PRAVINRAO ORDINARY ORIGINAL CIVIL JURISDICTION
PRAVINRAO Date:
2022.09.06
17:38:37
+0530 WRIT PETITION (L) NO. 21447 OF 2022
Godrej & Boyce Mfg. Co. Ltd.
Pirojshanagar, Vikhroli,
Mumbai 400 079 .....Petitioner
Vs.
1. Union of India
(Through the Secretary)
Ministry of Law and Justice,
Department of Legal Affairs,
Branch Secretariat, Aaykar Bhavan
Annexe, 2nd Floor, New Marine Lines,
Mumbai - 400 020
2. Commissioner of CGST
Navi Mumbai Commissionerate
16th Floor, Satra Plaza,
Sector 19D, Vashi,
Navi Mumbai - 400 705
3. Joint Commissioner of CGST
Navi Mumbai Commissionerate
16th Floor, Satra Plaza, Sector 19D, Vashi,
Navi Mumbai - 400 705 .....Respondents
Mr. Arshad Hidayatullah, Senior Advocate a/w Mr. Darius Shroff, Senior
Advocate, Mr. Anupam Dighe, Ms. Shailaja Kher, Mr. Makarand Joshi and
Ms. Chandni Tanna i/by India Law Alliance for Petitioner.
Mr. Jitendra B. Mishra a/w Ms. Sangeeta Yadav for Respondents.
CORAM : K. R. SHRIRAM &
A. S. DOCTOR, JJ.
DATE : 5th AUGUST, 2022
1/26
spm 2 J-WPL-21447-2022.doc
JUDGMENT :(PER A. S. DOCTOR, J.)
1. Rule. By consent of learned counsel for parties, Rule made returnable forthwith and heard finally.
2. The present Writ Petition impugns, i. Five show cause notices ("impugned notices") issued by Respondent No.3 to Petitioner; and ii. An order dated 30th March, 2022 ("impugned order") passed by Respondent No. 3 against Petitioner.
3. The facts briefly stated are that between the years 2008 and 2009 Respondent No. 3 issued the impugned notices to Petitioner inter alia alleging that Petitioner had contravened provisions of the Cenvat Credit Rules, 2004. The impugned notices on this premise called upon Petitioner to show cause why Central Excise Duty along with interest and penalty should not be recovered from Petitioners. The details of the impugned notices (date, period and amount demanded) are as follows, viz.
Date Period Amount Demanded
03.04.2008 March 03 to March 08 Rs. 1,07,95,975-00
02.05.2008 April 07 to June 07 Rs. 4,85,185-00
25.07.2008 July 07 to September 07 Rs. 17,40,145-00
24.10.2008 October 07 to December 07 Rs. 10,56,189-00
2/26
spm 3 J-WPL-21447-2022.doc
30.01.2009 January 08 to March 08 Rs. 24,34,634-00
4. Petitioner by its letter dated 26 th July, 2008 replied to the show cause notice dated 3rd April, 2008 and denied the allegations made therein. Thereafter, by a letter dated 8 th August, 2008 the Superintendent (Adjudication) Central Excise called upon Petitioner to furnish certain details duly certified by a Chartered Accountant. Petitioner by its letter dated 26 th September, 2008 duly submitted the information sought for.
5. Respondent No. 3 after a lapse of almost 13 years from the date of the last impugned notice, fixed a personal hearing on 28 th October, 2021. Petitioner filed written submissions on 27 th October, 2021 inter alia pointing out that the proceedings now initiated by Respondents pursuant to the impugned notices were non est and bad in law. Petitioner referred to and relied upon several judgements of this Hon'ble Court in support of the contention that since the show cause notices had not been acted upon within a reasonable period of time, the same were now stale and consequently any adjudication based thereon was bad in law and void. Petitioner thus requested Respondents to withdraw the impugned notices.
3/26
spm 4 J-WPL-21447-2022.doc
6. Respondents did not reply to Petitioner's letter but instead, after a period of over five months fixed another date for personal hearing on 11th March, 2022. Petitioner's representative attended the personal hearing before Respondent No. 3 and inter alia submitted:
a. that Respondent No. 3 did not have jurisdiction to continue the proceedings since the inquiry was in respect of show cause notices which were over 13 years old.
b. that the records pertaining to the case at hand were destroyed and/or untraceable.
c. that the officers of Petitioners acquainted with the facts of the case were no longer in Petitioners employment.
d. that grave prejudice would be caused to Petitioners if the impugned notices were adjudicated upon after such an inordinately long time.
7. Respondent No. 3 ignoring Petitioners contentions proceeded to pass the impugned order and confirmed a demand duty of Rs.1,65,12,218/- along with interest which amounted to 200% of 4/26 spm 5 J-WPL-21447-2022.doc duty amount. It was thus that Petitioners filed the present Writ Petition.
8. Mr. Hidayatullah, learned senior counsel, appearing on behalf of Petitioner made the following submissions viz., a. That the present case was squarely covered by a catena of judgements of this Hon'ble Court but laid special emphasis upon the case of (i) Raymond Ltd. vs. Union of India 1 and (ii) Parle International Limited vs. Union of India 2. Before taking us to the said judgments Mr. Hidayatullah highlighted the following facts pertaining to the present case, namely, viz. i. That all the show cause notices were issued well over a decade ago (i.e., in the year 2008 and 2009).
ii. That there was complete silence from Respondents for well over a decade.
iii. That Petitioner was never informed that the impugned notices were transferred to call book.
iv. That proceedings were suddenly revived after a period of 13 years.
v. That the impugned notices were adjudicated upon when
1 2019 (368) E.L.T. 481 (Bom)
2 2021 (375) ELT 633 (Bom)
5/26
spm 6 J-WPL-21447-2022.doc
the relevant papers were lost and/or untraceable and the concerned officers of Petitioner were no longer with Petitioner.
That the impugned notices had become stale since Respondents had not taken any action in respect thereof within a reasonable period of time nor had Respondents ever informed Petitioner of the fate of the impugned notices after issuance thereof. Petitioner only on receipt of the Affidavit in Reply for the first time learnt that Respondents had transferred the impugned notices to call book. Therefore, Petitioner was under the bonafide impression and belief that Respondents had decided not to pursue the impugned notices and had abandoned the same. b. Had Respondents informed Petitioner that the impugned notices were being transferred to call book, Petitioner could have, viz. i. challenged the impugned notices at that stage itself; ii. preserved the records/evidence etc. pertaining to the impugned notices and kept itself prepared to contest the same when required.
That grave prejudice had been caused to Petitioner on account of the inordinately long passage of time as (a) the relevant records 6/26 spm 7 J-WPL-21447-2022.doc pertaining to the subject matter of the impugned notices been destroyed and/or become untraceable and (b) the concerned officers of Petitioner who were conversant with the facts of the case were no longer in the employment of Petitioner. Thus, the sudden resurrection of the impugned notices after well over a decade without informing Petitioner that the same had been transferred to call book had put Petitioners in a position of irretrievable prejudice. He submitted that it would therefore be wholly inequitable if Respondents were permitted to take advantage/benefit from the very position of irretrievable prejudice in which they had put Petitioners in to begin with. c. Our attention was then invited to the judgment of this Hon'ble Court in the case of Parle (supra) with particular reference to the following paragraphs and it was submitted that the facts of the present case were squarely covered by the same, viz.
"23. In the present case, it is evident that the delay in adjudication of the show-cause notices could not be attributed to the petitioner. The delay occurred at the hands of the respondents. For the reasons mentioned, respondents have kept the show-cause notices in the call book but without informing the petitioner. Upon thorough consideration of the matter, we are of the view that such delayed adjudication after more than a decade, defeats the very purpose of issuing show-cause notice. When a show-cause notice is issued to a party, it is expected that the same would be taken to its logical consequence within a reasonable period so that a finality is reached. A period of 13 years as in the present case 7/26 spm 8 J-WPL-21447-2022.doc certainly cannot be construed to be a reasonable period. Petitioner cannot be faulted for taking the view that respondents had decided not to proceed with the show- cause notices. An assessee or a dealer or a taxable person must know where it stands after issuance of show-cause notice and submission of reply. If for more than 10 years thereafter there is no response from the departmental authorities, it cannot be faulted for taking the view that its reply had been accepted and the authorities have given a quietus to the matter. As has been rightly held by this Court in Raymond Limited (supra), such delayed adjudication wholly attributable to the revenue would be in contravention of procedural fairness and thus violative of the principles of natural justice. An action which is unfair and in violation of the principles of natural justice cannot be sustained. Sudden resurrection of the show-cause notices after 13 years, therefore, cannot be justified.
27. In any view of the matter when the commencement of adjudication proceedings after inordinate delay of 13 years post-issuance of show-cause notices and submission of reply is held to be untenable in law, any consequential decision or order based on such delayed adjudication would also be rendered invalid.
28. Thus, having regard to the discussions made above and taking an overall view of the matter we have no hesitation to hold that respondents were not justified in commencing adjudication proceeding 13 years after issuance of the show-cause notices dated 01.06.2006 and 28.11.2006. Such adjudication proceeding is therefore, held to be invalid. Consequently, impugned order-in-original dated 11.11.2019 issued by respondent No.3 would also stand interfered with. It is accordingly set aside and quashed." (emphasis supplied) He then invited our attention to the judgment of this Hon'ble Court in the case of Raymond (supra) with particular references to the following paragraphs, viz.
8/26
spm 9 J-WPL-21447-2022.doc
6. We specifically asked Mr. Jetly, Learned Counsel appearing for the Revenue, whether any intimation was given to the petitioners either in 2001 or in 2013 that the show cause notices are being kept in the call book and the reason for it i.e. awaiting a final decision in the CERA audit objection and / or the decision in the Apex Court in the appeal filed by the Revenue from the order of the Tribunal in case of petitioners' Indore and Bhopal Unit. Mr. Jetly very fairly states that no intimation of keeping the show cause notices in the call book was given. Thus, the occasion to give any reasons for it being kept in the call book to the petitioner did not arise.
7. In the aforesaid facts, the issue that arises for our consideration is whether in the present facts, commencement of adjudication proceedings after a long delay of 14 to 17 years is justified when the party in all these years has not been put to notice that the proceedings were kept in abeyance. In fact, this Court, in the case of Bhagwandas Tolani (Supra) decided as far back as 1982, has held that even if there is no time limit provided in the statute for adjudication proceeding, yet it is not permissible to commence adjudication proceeding after a long period of 10/15/20 years, particularly when the delay is not on account of any default on the part of the answering party. It further held that reopening of an adjudication proceeding after a long time would cause serious prejudice to the parties, as in the meantime, the relevant records may have been misplaced, the persons who were in charge of the affairs relating to issue raised in the showcause notice may no longer be available. Further, in Cambata Industries Pvt.Ltd. V/s. Additional Dir. Of Enforcement, Mumbai (2010) 254 ELT 269 (Bom), this Court held that in absence of any fault on the part of the petitioners, it is not open to the Revenue to reopen proceedings after long delay without justifiable reasons. In Hindustan Liver Limited v/s. Union of India 264 ELT 173 (Bom), this Court has observed as under :-
"15...................
The weight of the judicial pronouncements lean in favour of quashing the proceedings, if there has been an undue delay in deciding the 9/26 spm 10 J-WPL-21447-2022.doc same. See Government of India V/s. The Citedal Fine Pharmaceuticals, Madras and Ors., 42 ELT 515 (S.C.) and the judgment of the Division Benches of this Court in Bhagwandas S. Tolani V/s. B.C. Aggarwal and Ors. Reported in 1983 (12) ELT 44 (Bom.) and Universal Generics Pvt.
Ltd. V/s. Union of India reported in 1993 (68) ELT 27 (Bom.). The underlying principle laid down in the said judgments is that in absence of any period of limitation, it is required that every Authority is to exercise the power within a reasonable period."
8. Further, this Court in the case of M/s. Sanghvi Re conditioners (supra) had occasion to consider an identical submission as made before us by the Revenue i.e. showcause notices had been kept in the call book as an identical challenge in case of another assessee was pending in the Hon'ble Supreme Court. This defence on the part of the Revenue was negatived by the Court. This on the ground that accepting such a stand on behalf of the Revenue would defeat the rule of law itself. In fact, the Court noted as under :-
"Secondly, we also omit totally from our consideration the complaint of the petitioner that in a matter as old as of 1999, if now the adjudication has to be held, it will be impossible for them to trace out all the records and equally, contact those officials who may not be in their service any longer. Thus, they would have no opportunity, much less reasonable and fair, to defend the proceedings. That is equally a balancing factor in the facts and circumstances of the present case."
9. In the present facts, it is the case of the petitioner that because of long delay, papers and proceedings relevant to meet the show cause notice are not available. Thus, seriously hampering the petitioners to appropriately meet the show cause notice. This delay in taking up the adjudication of the show cause notice (in the absence of any fault on the part of the party complaining) is a facet of breach of principles of natural justice. It impinges on 10/26 spm 11 J-WPL-21447-2022.doc procedural fairness, in the absence of the party being put to notice that the show cause notices will be taken up for consideration, after some event and / or time, when it is not heard in a reasonable time. In the absence of the above, particularly as in this case, long delay has resulted in papers being misplaced. The reasonable period may vary for case to case. However, when the notices are being kept in abeyance (by keeping them in the call book as in this case), the Revenue should keep the parties informed of the same. This serves two fold purpose One it puts the party to notice that the show cause notice is still alive and is only kept in abeyance. Therefore, the party can then safeguard its evidence, till the show cause notice is taken up for adjudication. Secondly, if the notices are being kept in the call book for some reason, the party gets an opportunity to point out to the Revenue that the reasons for keeping it in call book are not correct and the notices could be adjudicated upon immediately. This is the transparent manner in which the State administration must function.
(emphasis supplied) Placing reliance upon the above judgments, Mr. Hidayatullah submitted that the facts from the present case were ad idem to the facts in the case of Parle and Raymond (supra) and thus Petitioners case was squarely covered. Hence, the impugned order and impugned notices required to be quashed and set aside. d. It was crucial to appreciate another aspect of the matter which had not fallen for consideration thus far in any of the judgments pertaining to adjudication of stale show cause notices. In the present case for no fault of Petitioner and solely on account of Respondents conduct/negligence, Petitioner had been saddled with an interest liability which was twice the duty/tax amount. It 11/26 spm 12 J-WPL-21447-2022.doc was wholly inequitable and unjust that Respondents on the one hand transferred the impugned notices to call book without even informing Petitioner and yet on the other hand continued to compute interest upon the duty/tax amount for the period for which the impugned notices were kept in call book. Such conduct itself was high-handed, arbitrary and entirely unjust. The interest computed apart from being extortionate was against every cannon of equity, justice and good conscience. e. Additionally, and without prejudice to above submissions, the impugned order was also perverse and belied a deliberate non- application of mind. The Court's attention was invited to paragraphs (a) to (d) of the written submissions filed by Petitioner, in which Petitioner had squarely raised the issue of the impugned notices being stale and incapable of being adjudicated upon along with the judgments in support of the said contention. Paragraphs (a) to (d) of the written submissions are reproduced herein for convenience, viz.
a) At the outset, we submit that the above matters are more than 13 years old and as such the Notices are to be considered non est. This is settled law and it has been consistently held by the Courts, that commencing adjudication process, after a long delay of 13 years, from the date of issuing the show cause notice, as is in the present case, is bad in law.
b) We further submit that we were under the reasonable belief 12/26 spm 13 J-WPL-21447-2022.doc that the Department was not interested in pursuing the matter covered by the above notices and had abandoned the issue raised therein.
c) We submit that commencing with these proceedings after a period of 13 years would be in violation of the principles of natural justice, as we were never informed by the Department for all these years, that the said matters are kept alive and it would cause grave prejudice to us, as we are not in a position to trace the relevant records on which we would want to rely in support of our case. Even the personnel who were handling these matters have long since retired and hence it would be unjust to proceed with the captioned Notices, after so many years and in direct conflict of the Principles of Natural Justice.
d) The above view has been consistently held by the Hon'ble High Courts in a catena of judgments and the same has also been confirmed by the Hon'ble Supreme Court in the following judgments;
Premier Ltd. Vs. UOI - 2017 (354) E.L.T. 365 (Bom.) [As confirmed by the Hon'ble Supreme Court Union of India v. Premier Ltd. - 2018 (360) E.L.T. A181 (S.C.)] Bhagwandas S. Tolani Vs B. C. Aggarwal and Others - 1983 (12) E.L.T. 44 (Bom) Rayment Ltd. Vs UOI - 2019 (368) E.L.T. 481 (Bom.) Cambata Indus. Pvt. Ltd. Vs Addnl Dir of Enforcement - 2010 (254) E.L.T. 269 (Bom) Reliance Industries Vs UOI - 2019 (368) ELT 854 (BOM) Sanghvi Reconditioners Vs UOI - 2018 (12) G.S.T.L. 290 (Bom.) Our attention was then invited to the impugned order and it was pointed out therefrom that Respondent No. 3 had completely glossed over and not so much as even attempted to consider, much less deal with Petitioner's submissions, as also the judgements relied upon. Therefore, it was plain that Respondent No. 3 had acted in a malafide manner and with a predetermined 13/26 spm 14 J-WPL-21447-2022.doc mind with the sole objective of holding Petitioner liable in terms of the charges levied in the impugned notices.
9. Per contra Mr. Mishra, learned counsel, appearing on behalf of Respondents submitted as follows:-
a. That Petitioner had an alternate and equally efficacious remedy by way of statutory Appeal. Petitioner's main grievance was that Respondent No. 3 had in the impugned order failed and neglected to consider and/or deal with the several judgments relied upon by Petitioner. Assuming Respondent No. 3 had in fact failed to properly consider the judgments cited this could well be raised in Appeal. In support of his contention Mr. Mishra placed reliance upon a judgment of this Hon'ble Court in the case of Hover Automotive India Pvt. Ltd. vs. Union of India and Others3 which held, "16. We must remember that the Commissioner, while he passed the order-in-original holding that dues of service tax are payable by the petitioner, was acting in an administrative capacity. Although the order made by him might have certain attributes of a quasi-judicial act and he could even ostensibly be seen as wearing the hat of an adjudicator, who is required to act quasi-judicially, still the Commissioner in the due discharge of his functions is not expected to author an order of assessment as if he were writing a judgment. A judicial order is obviously required to deal with the authorities 3 Order dated 29.10.2021 passed in Writ Petition No.2223 of 2021 14/26 spm 15 J-WPL-21447-2022.doc cited in a manner that reflects application of mind, but it is not always the case in respect of an order of the present nature. If at all, we would view the omission of the Commissioner not to separately deal with the authorities cited as something like an error committed within jurisdiction which is not the same as acting in excess of jurisdiction. Such error, if required, can be corrected by the Tribunal if at all the same is approached. We, therefore, do not propose to hold that the order impugned suffers from a violation of principles of natural justice. There is no ground of substance to entertain this writ petition despite the statutory remedy of appeal being available to the petitioner."
(emphasis supplied) In light of the above, even assuming Respondent No. 3 had failed to adequately deal with the authorities cited by Petitioner the same was an error which was within the jurisdiction of Respondent No. 3 and thus one which was capable of being redressed in Appeal. In the facts of the present case, Petitioner had wrongly invoked the extraordinary jurisdiction of this Hon'ble Court under article 226 of the Constitution of India. b. The next contention namely that Respondents had occasioned delay in adjudicating upon the impugned notices was also entirely misplaced. In the present case, that the impugned notices had been transferred to call book pursuant to the Board's circular dated 28th May, 2003 and it was only in the year 2021, that Respondents were permitted to take up for 15/26 spm 16 J-WPL-21447-2022.doc adjudication the impugned notices. Respondents on receipt of letter dated 21st May, 2021 (which enclosed the circular dated 19th May, 2021), promptly took steps to adjudicate upon the impugned notices. Therefore, the question of there being any delay or inaction on the part of Respondents did not arise. However, when a question was put to Mr. Mishra as to whether Petitioners were informed that the impugned notices had been transferred to call book, he fairly conceded that Petitioner had not been so informed.
10. In Rejoinder, Mr. Hidayatullah submitted as follows:-
a. That, reliance placed by Respondents upon the judgment in the case of Hover Automotive India Pvt. Ltd. (supra) was entirely misplaced and wholly inapplicable to the facts of the present case. The same was distinguished by pointing out that the challenge in the case of Hover Automotive India Pvt. Ltd.
(supra) arose on account of the failure of the assessing authority (in that case) to adequately deal with certain judgments cited before it, whereas the challenge in the present case was primarily one which arose on account of adjudication of stale show cause notices. This fact itself contravened 16/26 spm 17 J-WPL-21447-2022.doc procedural fairness and thus was a breach of the principles of natural justice. Further, the challenge in the present case was in respect of an order passed in violation of the principles of natural justice. Thus, the extraordinary jurisdiction of this Hon'ble Court was rightly invoked and was required to be exercised.
b. Insofar as Mr. Mishra's second contention, it was pointed out that Petitioner was never informed that the impugned notices had been transferred to call book. Petitioner became aware of this fact for the first time when Respondents filed the Affidavit in Reply. Respondents failure to inform Petitioner about the fate of the impugned circulars had resulted in grave prejudice being caused to Petitioner. It was no longer res integra that the sudden resurrection of the show notices after an inordinately long delay was reason enough to render the same invalid and any order passed based thereon, void.
11. We have heard the submissions of learned counsel appearing for both sides as also considered the case law relied upon by them. We have no hesitation in holding that the present Petition deserves to be allowed for the following reasons, viz., 17/26 spm 18 J-WPL-21447-2022.doc A. The law pertaining to adjudication of show cause notices is now well settled by various judgments, in particular Raymonds (supra) and Parle (supra) of this Hon'ble Court, from which the following can be culled out, viz., i. Even where the statue does not prescribe a time limit for adjudication, a show cause notice must be adjudicated upon within a reasonable time;
ii. Though reasonable time is flexible and would depend upon the facts and circumstances of each case, since the object of issuing a show cause notice is to secure and recover public revenue, larger public interest requires that revenue authorities act diligently and expeditiously when adjudicating the same;
iii. Diligence would include keeping the answering party informed when a show cause notice is kept in abeyance/transferred to call book,. This serves a twofold purpose, viz.,
(a) the answering party is put to notice that proceedings are still alive and the answering party can thus safeguard 18/26 spm 19 J-WPL-21447-2022.doc the necessary evidence etc. till such time as the show cause notice is taken up for adjudication; and/or
(b) the answering party could at that stage itself contest the show cause notice and/or point out why the same should be taken up for adjudication.
iv. Failure to keep the answering party informed about the fate of the show cause notice and delay in adjudicating the same (for no fault of answering party) impinges on procedural fairness and is thus a violation of the principles of natural justice;
v. Adjudication proceedings, delayed for more than a decade (for no fault of answering party and without putting answering party on notice for the reason of delay), defeats the very purpose of issuing show cause notice/s and such delayed adjudication is bad in law;
vi. An answering party who does not hear from the authorities for more than 10 years after issuance of show cause notice and submission of reply thereto is justified in taking the view that the reply had been accepted and the 19/26 spm 20 J-WPL-21447-2022.doc authorities had given a quietus to the matter; vii. It is not open to authorities to reopen adjudicating proceedings after a long delay without having compelling and justifiable reasons.
viii. Even where adjournments are sought frequently by the answering party, the same should not be granted liberally as this would give the impression that revenue is not interested in proceeding with the matter or rather has a vested interest in assisting the answering party. On considering the above, we find that the facts in the present case are squarely covered by the law laid down by this Hon'ble Court especially in the case of Parle (supra) and Raymond (supra). We find that the following facts of the present case are ad idem to the facts in the case of Parle (supra), viz., i. The impugned show cause notices were resurrected after 13 years (identical period in Parle);
ii. Petitioner was never informed that the impugned notices had been transferred to call book;
iii. With the passage of time (and failure to inform) Petitioner 20/26 spm 21 J-WPL-21447-2022.doc was put in a position of irretrievable prejudice as the evidence was lost/not traceable and the concerned persons were no longer in the employment of Petitioner. iv. No delay was occasioned on account of Petitioner. In light of the above, we find that the adjudication of the impugned notices by Respondent No. 3 in the present case was clearly bad in law and consequently the impugned order is also void. Respondent No. 3 had taken up the impugned notices for adjudication after a period of thirteen years from the date of issuance thereof and after submission of reply. This by all counts is well beyond the reasonable period of time in which Respondents were expected and required to act. Additionally, Respondents did not inform Petitioner that the impugned notices had been transferred to call book this coupled with the sudden resurrection of the impugned notices after over a decade has impinged on procedural fairness and put Petitioners in a position of irretrievable prejudice. The principles of natural justice and fair play in this case have clearly been violated by Respondents. Though Respondents have contended that the impugned notices were transferred to call book as per the circular of the Board, we find that even the Affidavit in Reply does not mention either the 21/26 spm 22 J-WPL-21447-2022.doc date on which the impugned notices were so transferred, nor does it annex a copy of the circular upon which Respondents have placed reliance. The least that was expected from Respondents was that they would have produced a copy of the relevant circular on which reliance has been placed. Another fact that is to be noted is that the circular relied upon by Respondent is dated 2003 and the impugned notices were issued in the year 2008/2009. Hence, absent production of the said circular and/or a proper explanation as to the contents of the same, Respondents contention that the impugned notices had been transferred to call book based thereon is completely unintelligible and mere ipse dixit. Thus, in the facts and circumstances of the present case, we have no hesitation in holding that Petitioner was entirely justified in concluding that Respondents had abandoned the impugned show notices.
B. Additionally, even on merit, we find that the impugned order is liable to be quashed and set aside. We find that there has been a deliberate dereliction of duty on the part of Respondent No. 3 because Respondent No. 3 has brazenly glossed over and ignored the specific submissions and case law relied upon by Petitioner pertaining to adjudication of stale show cause notices without so 22/26 spm 23 J-WPL-21447-2022.doc much as even attempting to deal with the same. The submissions made and case law relied upon by Petitioner would have gone to the root of the matter. We find that it is this conduct of Respondent No. 3 which amounts to a dereliction of duty and has resultantly occasioned grave injustice to Petitioner. Respondent No. 3 is enjoined with a duty and obligation in law to act in a fair, just and judicious manner. Respondent No. 3 has in the facts of the present case failed and neglected to exercise his jurisdiction in a transparent, fair and just manner as required and expected of him by law. Respondent No. 3 in fact acted in an ex facie pre- determined manner with the sole objective of upholding the contention/action of the Revenue at any cost. Such conduct coupled with the failure of Respondent No. 3 to exercise jurisdiction as required by law has resulted in grave injustice and prejudice being caused to Petitioners.
C. We also find Respondents contention that Petitioner has available an alternate and equally efficacious remedy by way of Appeal also to be misplaced and of no substance in the facts and circumstances of the present case. The judgment in the case of Hover Automotive India Pvt. Ltd. (supra) is also wholly inapplicable to the facts of the present case. The only challenge in 23/26 spm 24 J-WPL-21447-2022.doc the case of Hover Automotive India Pvt. Ltd. (supra) was one which pertained to failure of the authority (in that case) to properly construe and deal with certain judgments cited before it. The challenge in the present case, however, is one which pertains to the grave prejudice caused to Petitioner on account of the violation of the principles of natural justice occasioned by Respondents conduct in re-opening adjudication proceedings after an inordinate delay. It has now been conclusively held that such conduct on the part of revenue authorities is in contravention of procedural fairness and thus in violation of principles of natural justice and is therefore amenable to challenge by way of a writ jurisdiction. Infact, a careful reading of the judgment in the case of Hover Automotive India Pvt. Ltd. (supra) also specifically sets out that writ jurisdiction can always be invoked and is available to a party when there is any contravention of the principles of natural justice. It is useful to reproduce here paragraph 13 from the judgment of the case of Hover Automotive India Pvt. Ltd. (supra) which in turn relies upon the judgment of the Hon'ble Supreme Court of India in the case of the Assistant Commissioner of State Tax & Others vs M/s Commercial Steel Ltd .4 and reads thus, viz., 4 Dated 3rd September, 2021 passed in Civil Appeal No. 5121 of 2021 24/26 spm 25 J-WPL-21447-2022.doc
13. In this context, we consider it useful to also refer to paragraphs 11 and 12 of the decision in Commercial Steel Limited (supra) cited by the petitioner. Paragraphs 11 and 12 are quoted below: -
"11. The respondent had a statutory remedy under section 107. Instead of availing of the remedy, the respondent instituted a petition under Article 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is:
(i) a breach of fundamental rights;
(ii) a violation of the principles of natural justice;
(iii) an excess of jurisdiction; or
(iv) a challenge to the vires of the statute or delegated legislation.
12. In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent." (emphasis supplied) We therefore find that even though the remedy of Appeal is available, Petitioner is not required to exercise this alternate remedy in the facts and circumstances of the present case. The present Writ Petition is maintainable as the challenge in the present Writ Petition arises on account of the contravention of the 25/26 spm 26 J-WPL-21447-2022.doc rules of procedural fairness by Respondent. This conduct of Respondent as already held by us has resulted in grave prejudice being caused to Petitioner and amounts to a violation of the principles of natural justice. Thus, the present Writ Petition is squarely maintainable and Petitioner does not have to be relegated to the remedy of Appeal even though available. D. Another aspect which we must note and one which also highlights the inequitable manner in which Respondents have acted is the fact that even though the impugned notices had been transferred to call book, Respondents continued to compute interest on the duty/tax amount mentioned therein. Since we are setting aside the impugned order we are not going into this aspect presently.
12. For the reasons stated above, Rule is made absolute. Petition is allowed in terms of prayer clause (a) which reads thus: -
"(a) That this Hon'ble Court may issue a Writ of Certiorari or an appropriate direction or order calling for the records of the Petitioners' case to go into the legality and propriety thereof and thereafter to quash the Impugned Notices and the Impugned Order (Exhibit A-1 to A-5 and Exhibit F)."
(A. S. DOCTOR, J.) (K. R. SHRIRAM, J.)
26/26