Bombay HC Directs Union Finance Ministry to Address Delay in Adjudication of Show-Cause Notices

Mumbai: Expressing displeasure over the delay in the adjudication of show-cause notices issued under various Central acts, the Bombay High Court has directed the Union Finance Ministry to take a serious view of the matter.

A division bench comprising Justice G S Kulkarni and Jitendra Jain noted on August 22 that a robust approach should be adopted for effectively adjudicating show-cause notices.

HC bench quashes notice

The High Court made this observation while hearing a petition filed by the city-based firm UPL Limited, seeking to quash a show-cause notice issued to it in October 2010 by the Commissioner of the Central Excise department, alleging non-payment of service tax.

The bench quashed the notice while remarking that this was "another classic case of lackadaisical approach" by the Commissioner of the Central Excise Department in not adjudicating a show-cause notice issued 13 years ago.

The judges stated that they were constrained to take judicial notice of a series of petitions complaining that officers, exercising enormous powers under Central Acts, have not adjudicated show-cause notices for unduly long periods, as much as ten years in some cases.

HC directed an order copy should be sent to Finance Ministry Secretary

“In our opinion, a serious view in this regard is required to be taken by the Ministry of Finance in regard to the officers who are not diligently discharging such vital duties and who, in fact, are playing with the public revenue,” it added.

The court stated that a copy of its order should be forwarded to the Secretary of the Finance Ministry “so as to apprise him of the legal approach to be adopted by the adjudicating officers, who are vested with such substantial powers of issuing show-cause notices and who are dealing with public revenue, so that a robust approach can be adopted in effectively adjudicating the show-cause notices, unless such a mechanism already exists."