In a relief to The Bombay Dyeing and Manufacturing Company Limited, the Bombay High Court quashed the show cause notice issued to it by the Central Excise authorities in 2005.
While quashing the notice on February 14, a division bench of justices RD Dhanuka and SM Modak observed: “It is not expected from the assessee to preserve the evidence/record intact for such a long period to be produced at the time of hearing of the Show-Cause Notice… In view of the gross delay on the part of the Respondent (central excise authorities), the Petitioner (Bombay Dyeing) cannot be made to suffer.”
The HC was hearing a petition filed by Bombay Dyeing challenging the adjudication of the notice issued to it on September 16, 2005 to which it had replied to within four weeks on receiving the notice. However, after that it did not receive any further communication for hearing or any adjudication upon the said Show Cause Notice till today.
Bombay Dyeing’s counsels – Ishaan Patkar and Yash Dhond – contended that they were never informed that the notice was kept in the call book after they had responded to it.
They pointed out a November 2020 judgment in case of Parle International Ltd. Vs. Union of India wherein it was held that respondents cannot be allowed to proceed with the notice after such a long period of time. In Parle’s case there was a delay of 13 years.
The HC had said in Parle case that when the show-cause notice is kept in the call book, the parties should be informed about it so that they know that the “show cause notice is still alive and is only kept in abeyance”. This would enable the party concerned to safeguard the evidence till the show-cause notice is taken up for adjudication, the HC had said.
The HC had further said in Parle matter: “If the notices are kept in the call book, the parties get an opportunity to point out to the revenue that the reasons for keeping it in the call book are not correct and that the notices should be adjudicated promptly.”
In the Bombay Dyeing case, the HC said: “The Respondent having issued the Show-Cause notice, it is their duty to take the said show-cause notice to its logical conclusion by adjudicating upon the said show-cause notice within a reasonable period of time.... Hearing of show-cause notice belatedly is in violation of natural justice.”
