Rajasthan High Court - Jodhpur
Prem Cables Private Ltd vs The Assistant Commissioner, Cgst ... on 16 May, 2022
Bench: Sandeep Mehta, Vinod Kumar Bharwani
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 14492/2021
P G Foils Limited, Having Its Manufacturing Unit And Factory
Office At Papaliya Kalan, Distt. Pali (Raj) Through Its Managing
Pankaj P. Shah, S/o Ld. Sh. Paras Raj Shah, Aged 65 Years
----Petitioner
Versus
1. The Assistant Commissioner, Cgst, Division-D, Mahaveer
Nagar, Pali.
2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur.
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
Connected With
D.B. Civil Writ Petition No. 13838/2021
Pg Foils Ltd., Having Its Manufacturing Unit And Factory Office At
Papaliya Kalan, Distt. Pali (Raj.) Through Its Managing Director
Pankaj P. Shah S/o Ld. Sh. Paras Raj Shah, Aged 65 Years, R/o
Papaliya Kalan, Distt. Pali (Raj.).
----Petitioner
Versus
1. The Assistant Commissioner, Cgst, Division-D, Mahaveer
Nagar, Pali.
2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur.
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
D.B. Civil Writ Petition No. 15131/2021
Prem Cables Private Ltd., Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Dist. Pali (Raj) Through Its
Director Abhay P. Shah S/o Ld. Paras Raj Shah, Aged 55 Years,
R/o Papaliya Kalan, Dist. Pali (Raj)
----Petitioner
Versus
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1. The Assistant Comissioner, Cgst Div.-D, Mahaveer Nagar,
Pali
2. The Superintendent (Adjudication), Central Goods And
Service Tax, Division-D, Jaipur
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
D.B. Civil Writ Petition No. 15157/2021
Prem Cables Private Ltd., Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Dist. Pali (Raj) Through Its
Director Abhay P. Shah S/o Ld. Paras Raj Shah, Aged 55 Years,
R/o Papaliya Kalan, Dist. Pali (Raj)
----Petitioner
Versus
1. The Assistant Comissioner, Cgst Div.-D, Mahaveer Nagar,
Pali
2. The Superintendent (Adjudication), Central Goods And
Service Tax, Division-D, Jaipur
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
D.B. Civil Writ Petition No. 15162/2021
Prem Cables Private Limited, Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Distt. Pali (Raj) Through Its
Director Abhay P. Shah S/o Ld. Sh. Paras Raj Shah, Aged 55
Years, R/o Papaliya Kalan, Distt. Pali (Raj)
----Petitioner
Versus
1. The Assistant Comissioner, Cgst Division-D, Mahaveer
Nagar, Pali
2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur
3. The Commissioner, Central Goods And Services Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
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(3 of 24) [CW-14492/2021]
D.B. Civil Writ Petition No. 15308/2021
Prem Cables Private Limited, Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Distt. Pali (Raj.) Through Its
Director Abhay P. Shah, S/o Ld. Sh. Paras Raj Shah, Aged 55
Years, R/o Papaliya Kalan, Distt. Pali (Raj)
----Petitioner
Versus
1. The Assistant Commissioner, Cgst Division-D, Mahaveer
Nagar, Pali
2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
D.B. Civil Writ Petition No. 15501/2021
Prem Cables Private Ltd., Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Distt. Pali (Raj.) Through Its
Director Abhay P. Shah, S/o Ld. Sh. Paras Raj Shah, Aged 55
Years, R/o Papaliya Kalan, Distt. Pali (Raj)
----Petitioner
Versus
1. The Assistant Commissioner, Cgst Division-D, Mahaveer
Nagar Pali
2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
D.B. Civil Writ Petition No. 15503/2021
Prem Cables Private Ltd., Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Distt. Pali (Raj.) Through Its
Director Abhay P. Shah, S/o Ld. Sh. Paras Raj Shah, Aged 55
Years, R/o Papaliya Kalan, Distt. Pali (Raj)
----Petitioner
Versus
1. The Assistant Commissioner, Cgst Division-D, Mahaveer
Nagar, Pali
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2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
D.B. Civil Writ Petition No. 15504/2021
Prem Cables Private Ltd., Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Distt. Pali (Raj.) Through Its
Director Abhay P. Shah, S/o Ld. Sh. Paras Raj Shah, Aged 55
Years, R/o Papaliya Kalan, Distt. Pali (Raj)
----Petitioner
Versus
1. The Assistant Commissioner, Cgst Division-D, Mahaveer
Nagar, Pali
2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
D.B. Civil Writ Petition No. 15755/2021
Prem Cables Private Ltd., Having Its Manufacturing Unit And
Factory Office At Papaliya Kalan, Distt. Pali (Raj.) Through Its
Director Abhay P. Shah S/o Ld. Sh. Paras Raj Shah, Aged 55
Years, R/o Papaliya Kalan, Distt. Pali (Raj.).
----Petitioner
Versus
1. The Assistant Commissioner, Cgst Div.-D, Mahaveer
Nagar, Pali.
2. The Superintendent (Adjudication), Central Goods And
Services Tax, Division-D, Jaipur.
3. The Commissioner, Central Goods And Service Tax,
Jodhpur, Opp. Diesel Shed, Basni Ind. Area, Jodhpur.
----Respondents
For Petitioner(s) : Mr. Ankit Totuka
Mr. Sheetal Kumbhat
For Respondent(s) : Mr. Rajvendra Saraswat
Mr. Ramdev Rajpurohit
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(5 of 24) [CW-14492/2021]
HON'BLE MR. JUSTICE SANDEEP MEHTA
HON'BLE MR. JUSTICE VINOD KUMAR BHARWANI
Order
Order pronounced on : 16/05/2022
Order Reserved on : 22/03/2022
BY THE COURT : PER HON'BLE MEHTA, J.
The instant bunch of writ petitions involves common
questions of fact and law and hence, the same have been heard
and are being decided together by this order.
The petitioner P G Foils Limited is engaged in
manufacturing of aluminum foils and poly laminated aluminum
foils, whereas petitioner Prem Cables Private Limited is engaged in
manufacturing of ACSR and AAC conductors. Both have
manufacturing units at Village Pipaliya Kalan, District Pali and hold
Central Excise registration.
Through the instant bunch of writ petitions, the
petitioners have collectively challenged the show cause notices
issued to them by the respondent Assistant Commissioner, CGST,
Division-D, Pali. The original show cause notices towards demand
of Central Exicse Duty were issued between the years 2007 and
2012. It is claimed that these notices were consigned to the Call
Book on account of pendency of similar controversy before the
Hon'ble Supreme Court. The proceedings were revived, the
matters were taken out of the Call Book and intimations of revival
of proceedings and for personal hearing were sent to the
petitioners in the years 2020 and 2021. The details of the original
show cause notices and the revival notices are extracted in a
tabular form hereinbelow for the sake of ready reference :-
(6 of 24) [CW-14492/2021]
S. Writ Petition Number of original show Date of
No. Number cause notice and date of revival of
and petitioner's its issuance show cause
name notice
1. DBCWP V(76)30/09/08/551-552 08.12.2020
No.14492/2021 dated 08.01.2008
(PG Foils Ltd.)
2. DBCWP No. V(76)15/off/ADJ-II/199/07 27.11.2020
13838/2021 dated 16.04.2007
(PG Foils Ltd.)
3. DBCWP No. V(76)Adj-II/JPR- 21.01.2021
15131/2021 II/463/08/3156 dated
(Prem Cables) 09.09.2009
4. DBCWP No. V(76)/30/70/2010/8024 21.01.2021
15157/2021 dated 26.05.2010
(Prem Cables)
5. DBCWP No. V(76)30/357/2009/431 21.01.2021
15162/2021 dated 08.01.2010
(Prem Cables)
6. DBCWP No. V(76)30/13/2012/5445-46 21.01.2021
15308/2021 dated 24.04.2012
(Prem Cables)
7. DBCWP No. V(76)30/85/2012/1183 21.01.2021
15501/2021 dated 16.10.2012
(Prem Cables)
8. DBCWP No. V(76)15/off/Adj.II/380/06 21.01.2021
15503/2021 dated 17.04.2007
(Prem Cables)
9. DBCWP No. V(76)30/47/2011 21.01.2021
15504/2021 dated 18.10.2011
(Prem Cables)
10. DBCWP No. V(76)30/213/2010/21153 21.01.2021
15755/2021 dated 01.11.2010
(Prem Cables)
The petitioners have challenged the revival notices on
the ground that after issuance of original show cause notices, no
intimation whatsoever was given to them regarding the status
thereof or that the same had been consigned to the Call Book.
Upon receiving the revival notices, the petitioners submitted
replies/objections praying to be provided the following
information/details :
(a) the date on which the cases were transferred to the Call Book;
(7 of 24) [CW-14492/2021]
(b) the details of the matter pending before the Hon'ble Supreme
Court; and
(c) the issue involved in the said matter and the present status of
the said case.
Despite the said request having been submitted by the
petitioners, no information was provided and out of the blue,
notices intimating last chance of personal hearing were
communicated to the petitioners/their authorized representatives.
These notices were responded with a request to provide a proper
and fair chance of hearing and to provide effective links for
hearing through video conferencing because the restrictions owing
to COVID 19 pandemic were prevailing. It is in this background
and in absence of appropriate response to the request for being
provided with relevant details and opportunity of hearing that
these writ petitions have been preferred by the petitioners for
assailing the original show cause notices and the revival notices.
Interim orders were passed by this court in all these
writ petitions restraining the respondents from proceeding in
furtherance of the impugned show cause notices.
Reply has been filed on behalf of the Revenue in Writ
Petition Nos.14492/2021 and 15131/2021. Learned counsel for
the respondents submitted that the reply filed in these two writ
petitions may be adopted in the remaining writ petitions as the
factual and legal matrix is identical in all writ petitions.
Final arguments have been heard.
(8 of 24) [CW-14492/2021]
Learned counsel Mr. Ankit Totuka and Mr. Sheetal
Kumbhat, representing the petitioners, vehemently and fervently
urged that revival of the adjudication proceedings after a gross,
inordinate and unexplained delay ranging between 8 to 13 years,
post issuance of the original show cause notices is highly arbitrary
and untenable in law. No details were ever provided by the
respondents to the petitioners that post issuance of the original
show cause notices, the matters were consigned to the Call Book.
Learned counsel for the petitioners placed reliance on
circulars/guidelines governing the transfer of cases in the Customs
and Central Excise Department to the Call Book. The first circular
relied upon by the petitioners was issued by the Government of
India, Ministry of Finance (Department of Revenue), Central Board
of Excise & Customs, New Delhi on 14.12.1995 and it stipulates as
below :-
"Kindly refer to the instructions contained in the
Board's D.O. letter F.No. 101/2/92-CX.2 dated 4th
March, 1992 directing that a case should be transferred
to the Call Book with the approval of Commissioner/
Commissioner (Judicial) / DG etc. as the case may be .
It is further stated the Board's Circular No. 53/90-CX.3
dated 6.9.1990, specifies the circumstances under
which a pending case can be transferred to Call Book.
As per the extracts of the Manual of Office Procedure
enclosed with the said circular "if a current case has
reached a stage when no action can or need be taken
to expedite its disposal for at least 6 months (e.g.cases
held up in law courts) it may be transferred to the Call
Book with the approval of the Competent Authority".
(9 of 24) [CW-14492/2021]
Reliance was also placed on the Circular dated
30.03.1998, whereby the Central Board of Excise and Customs
directed that the Commissioners shall review the cases transferred
to the Call Book on monthly basis and ensure that all such cases
are transferred strictly in terms of the instructions and are
properly subjected to the prescribed periodical review, both by the
Commissioners as well as the Board.
Another Circular dated 28.05.2003 was referred to,
wherein the Central Board of Excise and Customs issued the
following instructions :-
"2. The matter has again been examined with reference
to PAC's recommendation on Paras 2.5 and 2.6 of the C
& AG Report for the year 1998-99 relating to inordinate
delay for recovery of confirmed demands and non-
adjudication of demands respectively contained in 39th
Report. In this regard it is found that the existing
instructions of the Board on the issue are not being
scrupulously followed by the field formations. The
pendency of call book cases continues to be very high.
Therefore, the Board while reiterating its earlier
instructions, has decided that the respective Chief
Commissioner should monitor progress of disposal of
call book cases specifically to see whether -
1. Call Book cases have been reviewed by the CCEs.
2. Any appreciable progress is noticed.
3. Any avoidable delays are there.
3. It is further directed that a one-time comprehensive
review of all the pending call book cases will be done
by respective CCEs. The Chief Commissioner may
monitor such review periodically in their respective
zones. The progress report of the call book cases
should continue to mention in the MTR as well as in the
(10 of 24) [CW-14492/2021]
monthly statements of the progress achieved in "Key
Result Areas".
Reliance was also placed on the instructions issued by
the Government of India, Ministry of Finance, Department of
Revenue, Central Board of Indirect Taxes and Customs dated
18.11.2021 pertaining to Call Book cases. The relevant parts of
these instructions read as below :-
"4.4 Audit in its report has also pointed incidences of
periodical non-review of Call Book cases, non/delayed
retrieval of SCNs from Call Book, incorrect transfer of
SCNs to Call Book, resulting in irregular retention of
cases in Call Book.
4.4.1 Kind attention is invited to Board's D.O. letter
F.No. 101/2/92-CX.3 dated 04.03.1992 wherein while
indicating the categories of the cases to be transferred
to call book, it was directed that a case should be
transferred to call book only with the approval of
Commissioner. Further, the Commissioners were
instructed to review the Call book cases on monthly
basis. These instructions have subsequently been
reiterated vide Circular No.385/18/98-CX, dated 30-3-
1998 and Circular No.719/35/2003-CX dated
28.05.2003. Audit has pointed out certain instances
where Call book cases are not reviewed periodically,
due to which there are instances of delay in retrieval of
Call book cases. It is therefore, reiterated that
instructions in above mentioned D.O. letter and
subsequent instructions/circulars must be adhered to
and Pr. Commissioners/Commissioners must review
Call book cases on monthly basis. Non-adherence to
these instructions shall be viewed seriously.
4.4.2 Audit has also pointed certain instances where
noticees are not intimated about transfer of SCNs to
(11 of 24) [CW-14492/2021]
Call book. Attention is invited to para 9.4 of the
instructions issued vide Master circular
No.1053/02/2017-CX dated 10.03.2017 which reads as
under :
"9.4 Intimation of Call book cases to noticee : A
formal communication should be issued to the
noticee, where the case has been transferred to
the call book."
4.4.3 Therefore, it should be ensured that instructions
issued vide Master circular no.1053/02/2017/CX dated
10.03.2017 in this regard are adhered to.
4.4.4 Further, it has been pointed that in
contravention to the Board's D.O. letter dated
04.03.1992, there are instances where prior approval is
not taken from the Commissioner before transferring
the case to Call book. In this regard, the instructions
issued by the Board vide above mentioned D.O. letter
dated 04.03.1992 are reiterated. The cases must be
transferred to call book only with the approval of
Commissioner as stipulated earlier. A comprehensive
one-time review of all cases may also be carried out in
this regard and necessary action taken."
Learned counsel for the petitioners urged that the
respondents did not give any intimation whatsoever to the
petitioners that the original show cause notices were actually
placed in the Call Book and if so, the reasons for the said decision.
Even in the reply, no averment is made as to whether the
assessment proceedings arising out of the original show cause
notices referred to supra were actually transferred to the Call
Book. No rebuttal has been made to the specific assertion of the
(12 of 24) [CW-14492/2021]
petitioners regarding the cases having been sent to the Call Book
without prior approval of the Commissioner. The petitioners'
counsel further urged that since the petitioners were never given
any intimation regarding the cases having been transferred to the
Call Book, their right to defend against the impugned show cause
notices has been severely prejudiced because in absence of any
such intimation, it cannot be expected that the petitioners would
continue to retain the defence evidence, documentary and
otherwise, which would have been available when the show cause
notices in original were issued. Reliance in support of these
submissions was placed by the petitioners' counsel on the
following judgments:-
1. Parle International Limited Vs. Union of India and Ors.
[2021 (375) ELT 633 (Bom.)]
2. Raymond Ltd. Vs. Union of India [2019 (368) ELT 481
(Bom.)]
3. Siddhi Vinayak Syntex Pvt. Ltd. Vs. Union of India and
Ors. [2017 (352) ELT 455 (Guj.)]
On these factual and legal grounds, the petitioners'
counsel vehemently and fervently implored the court to accept the
writ petitions and quash the impugned show cause notices and
revival notices as being arbitrary, contrary to mandatory
instructions issued by the Ministry of Finance and on the ground of
inordinate and unexplained delay in concluding the proceedings.
Mr. Rajvendra Saraswat and Mr. Ramdev Rajpurohit,
learned counsel representing the respondents, submit that the
reply filed in the lead case, i.e. D.B. Civil Writ Petition
No.14492/2021, may be adopted in the remaining writ petitions as
(13 of 24) [CW-14492/2021]
the factual and legal controversy involved in all the matters is
common.
Mr. Saraswat, vehemently opposed the submissions
advanced by the petitioners' counsel and urged that the original
show cause notices, which were issued to the petitioners, involved
issues, which were pending adjudication before the Hon'ble
Supreme Court and thus, the cases were transferred to Call Book.
Before taking this decision, the instructions issued by the Ministry
of Finance and Central Board of Excise and Customs were strictly
complied. Proper procedure was adopted with the necessary
approval of the competent authority as per the statutory
provisions and the mandatory guidelines while taking the decision
to transfer the cases to the call book. The controversy pending
before Hon'ble Supreme Court was adjudicated whereafter the
proceedings were revived. Before revival of the show cause
notices, the petitioners were given complete details regarding the
sending of the show cause notices to the Call Book; the judicial
matter, owing to the pendency whereof, the decision was taken to
send the cases to the Call Book and the reasons for which such a
course of action was adopted. Mr. Saraswat referred to the
averments made in the reply and implored the court to dismiss
the writ petitions.
We have given our thoughtful consideration to the
submissions advanced at bar and have gone through the material
available on record.
It is an admitted position that the original show cause
notices were issued to the petitioners between the years 2007 and
(14 of 24) [CW-14492/2021]
2012. There is no denial on part of the respondents that the
decision to send assessment proceedings sought to be taken
under these show cause notices to the Call Book was never
communicated to the petitioners. The revival notices were issued
out of the blue in the years 2020 and 2021. Immediately on
receiving the revival notices, the petitioners forwarded letters to
the respondent Assistant Commissioner, CGST seeking reasons for
sending the cases to the Call Book and for revival of the show
cause notices after such inordinate delay. Request letters were
also forwarded by the petitioners to provide link for VC so as to
advance the arguments. It is undisputed that neither any reply
was given to the petitioners despite their pertinent request nor
was any link of hearing through VC was provided despite pertinent
demand being made. Apparently, thus, the respondent authorities
were playing a game of hide and seek with the petitioners.
Specific grounds have been raised in the writ petition
regarding non-compliance of the mandatory Circulars issued by
the Ministry of Finance (supra) pertaining to procedure for sending
of the cases to the Call Book, viz. no communication was ever
made by the respondents to the petitioners regarding the decision
to transfer the impugned show cause notices to the Call Book;
neither were the cases sent to the Call Book with prior approval of
the Commissioner in terms of the Circular dated 14.12.1995 nor
was any review made by the Commissioner for timely disposal of
the cases. In the reply filed to the lead Writ Petitions
Nos.14492/2021 and 15131/2021, on this aspect of the matter,
the respondents have pleaded as below :-
(15 of 24) [CW-14492/2021]
"IV. The said SCN was kept pending for adjudication
and was transferred to Call Book as the department
had filed appeal in an identical issue before High Court
in Appeal No.12/2012 in case of M/s. J.K. Cement and
the same was pending for decision. It is submitted that
SCNs were transferred to call book in view of Board"s
D.O. letter F.No.101/2/92-CX.2 dated 4th March, 1992
wherein stated that a case should be transferred to the
Call Book with the approval of
Commissioner/Commissioner (Judicial)/DG etc. as the
case may be."
A belated plea was taken by the Revenue in the letter
dated 20.07.2021 that the show cause notices were sent to the
Call Book on the ground of pendency of litigation pertaining to
service tax on Outward Freight of M/s. J.K. Cement Works [Central
Excise Appeal No.12/2012] before the Rajasthan High Court, but
no details of the controversy involved in the said matter and the
reason as to how it affected the disposal of the impugned show
cause notices was mentioned in the communication nor any such
explanation has been offered in the reply. On a perusal of the
reply filed by the respondents in the lead Writ Petition
No.14492/2021, it becomes clear that even bare details have not
been set out therein as to the date or time when the respondent
authorities decided to transfer the original show cause notices to
the Call Book.
The reply is silent on the aspect whether any formal
decision was actually taken to transfer the cases to the Call Book.
(16 of 24) [CW-14492/2021]
Seen in light of the mandatory Circulars referred to
supra, approval of the Commissioner was essential before taking a
decision to transfer the cases to the Call Book. It is nowhere
stated in the reply that any such approval was actually taken
before directing to transfer of the cases to the Call Book. Thus, it
can safely be assumed that the entire procedure of transferring
the cases to the Call Book, if at all, was undertaken in a
perfunctory and clandestine manner without following the
procedure prescribed in the Circulars supra.
There is a strong foundation for making such
observation. The reason, which has been assigned by the
respondents in the letter dated 20.07.2021 for transferring the
cases to the Call Book is that a similar matter of Service Tax in
respect of Outward Freight of M/s. J.K. cement Works being
Central Excise Appeal No.12/2012, was pending before the
Rajasthan High Court. As is manifest from the chart (supra), 8
out of 10 impugned show cause notices were issued to the
petitioners between the years 2007 and 2010. Thus, manifestly
pendency of the Excise Appeal of J.K. Cement, which came to be
registered before the Rajsthan High Court in the year 2012 could
not have been a reason for transferring these cases in the Call
Book because that eventuality had not even arisen before issuance
of a majority of the show cause notices. The respondents have
not elaborated in the reply as to how the controversy in the case
of J.K. Cement was relevant to the show cause notices impugned
by the petitioners in these writ petitions.
(17 of 24) [CW-14492/2021]
It was absolutely essential for the Department to have
communicated to the petitioners that the show cause notices had
been transferred to the Call Book and the reasons for this course
of action. In para (D) of the reply, the respondents have claimed
that the petitioners were well aware of the pending cases as they
have received the show cause notices and the replied to the same
through their authorized person M/s. P.S. Choudhary and
Associates. In response to personal hearing letters issued post
revival, the petitioners asked for the reasons/grounds for keeping
the show cause notices pending, which has been replied vide letter
dated 20.07.2021. Apparently, thus, it is an admitted position
that fate of the original show cause notices, viz. the same having
been sent to the call book and the reasons for this decision was
never communicated to the petitioners for different periods
ranging from 8 years to 13 years. Thus, there is gross and
inordinate delay in revival of the impugned show cause notices.
The Hon'ble Supreme Court in the case of A.R.
Antulay v. R.S. Nayak & Anr [AIR 1988 SC 1531] made
certain observations regarding adverse effect caused by delay on
the trial of a case. It was observed that owing to delay, memory
tends to fade and the evidence may disappear.
As, no information was given to the petitioners for
years together regarding the show cause notices having been
transferred to the Call Book, they could be expected to entertain a
genuine belief that the proceedings might have been dropped.
There was no reason for the petitioners to preserve the evidence,
(18 of 24) [CW-14492/2021]
which may prove crucial for defending the assessment
proceedings under the impugned notices.
We are of the view that the respondents have failed to
satisfy the court that as a matter of fact any conscious, considered
decision was ever taken to transfer the original show cause notices
to the Call Book and if so, with prior approval of the Commissioner
in terms of the instructions issued vide Circular dated 14.12.1995.
Further, the cases were never reviewed as is essential by effect of
these circulars. Hence, revival of these proceedings after a gross
inordinate and unexplained delay is clearly unjustified.
Furthermore, non-intimation of the decision to transfer the original
show cause notices to the Call Book to the petitioners herein, has
resulted into grave prejudice being caused to them because on
account of the delay in revival of the notices, the opportunity of
contesting the assessment proceedings has been severely
impaired.
The controversy at hand is squarely covered by the
Division Bench Judgment rendered by Hon'ble Bombay High Court
while examining similar controversy in Parle International
Limited (supra), wherein, it was held as below :-
"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-
(19 of 24) [CW-14492/2021]
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 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."
The Hon'ble Bombay High Court considered a similar
controversy in the case of Raymond Ltd. Vs. Union of India
(supra) and held as below :-
"10. In fact, we note that the above manner of
functioning is the objective of the State administration,
as our attention has been drawn to the C.B.E. & C.
Circular No.1053/2/2017-CX., dated 10-3-2017. In
Paragraph 9.4 of the above circular of C.B.E. & C. has
directed the officers of the department to formally
communicate to the party that the notices which have
been issued to them, are being transferred to the call
(20 of 24) [CW-14492/2021]
book. This would be expected of the State even in the
absence of the above circular; the circular only states
the obvious. In this case, the show cause; notices were
kept in the call book not at the instance of petitioner,
but by the Revenue of its own accord. After having kept
it in the call book, no intimation/communication was
sent by the Commissioner pointing out that the show
cause notices had been kept in the call book. Thus,
bringing it to the notice of the petitioners that the show
cause notices are still alive and would be subject to
adjudication after the show cause notices are retrieved
from the call book on the dispute which led to keeping
it in the call book being resolved. This, admittedly has
not been done by the Revenue in this case.
11. Therefore, it was reasonable for the petitioners to
proceed on the basis that the department was not
interested in prosecuting the show cause notices and
had abandoned it. These proceedings are now being
commenced after such a long gap, after having led the
petitioner to reasonably expect that the proceedings
are dropped. Therefore, even if, notices can be kept in
the call book to avoid multiplicity of the proceedings,
yet the principle of natural justice would require that
before the notices are kept in the call book, or soon
after the petitioners are informed the status of the
show cause notices so as to put the parties to notice
that the show cause notices are still pending. Giving
notices for hearing after gap of 17 years, as in this
case, is to catch the parties by surprise and prejudice a
fair trial, as the documents relevant to the show cause
notices are not available with the petitioners."
Adjudicating a similar controversy in the case of Siddhi
Vinayak Syntex Pvt. Ltd. (supra), the Hon'ble Gujarat High
Court held as below :-
(21 of 24) [CW-14492/2021]
"23. Insofar as the show cause notice in the instant
case is concerned, the same has been issued under
section 11A of the Act. Proceedings under section 11A
of the Act are adjudicatory proceedings and the
authority which decides the same is a quasi-judicial
authority. Such proceedings are strictly governed by
the statutory provisions. Section 11A of the Act as it
stood at the relevant time when the show cause notice
came to be issued, provided for issuance of notice
within six months from the relevant date in ordinary
cases and within five years in case where the extended
period of limitation is invoked. Section 11A thereafter
has been amended from time to time and in the year
2011, various amendments came to be made in the
section including insertion of subsection (11) which
provides that the Central Excise Officer shall determine
the amount of duty of excise under sub-section (10) -
"(a) within six months from the date of notice where it
is possible to do so, in respect of cases falling under
Sub-section (1);
(b) within one year from the date of notice, where it is
possible to do so, in respect of cases falling under Sub-
section (4) or sub-section (5).
24 . Thus, with effect from the year 2011 a time limit
has been prescribed for determining the amount of
duty of excise where it is possible. It cannot be
gainsaid that when the legislature prescribes a time
limit, it is incumbent upon the authority to abide by the
same. While it is true that the legislature has provided
for such abiding by the time limit where it is possible to
do so, sub-section (11) of section 11A of the Act gives
an indication as to the legislative intent, namely that as
far as may be possible the amount of duty should be
determined within the above time frame, viz. six
(22 of 24) [CW-14492/2021]
months from the date of the notice in respect of cases
falling under Sub-section (1) and one year from the
date of the notice in respect of cases falling under sub-
section (4) or subsection (5). When the legislature has
used the expression "where it is possible to do so", it
means that if in the ordinary course it is possible to
determine the amount of duty within the specified time
frame, it should be so done. The legislature has wisely
not prescribed a time limit and has specified such time
limit where it is possible to do so, for the reason that
the adjudicating authority for several reasons may not
be in a position to decide the matter within the
specified time frame, namely, a large number of
witnesses may have to be examined, the record of the
case may be very bulky, huge workload, non-
availability of an officer, etc. which are genuine reasons
for not being able to determine the amount of duty
within the stipulated time frame. However, when a
matter is consigned to the call book and kept in cold
storage for years together, it is not on account of it not
being possible for the authority to decide the case, but
on grounds which are extraneous to the proceedings.
In the opinion of this court, when the legislature in its
wisdom has prescribed a particular time limit, the CBEC
has no power or authority to extend such time limit for
years on end merely to await a decision in another
case. The adjudicatory authority is required to decide
each case as it comes, unless restrained by an order of
a higher forum. This court is of the view that the
concept of call book created by the CBEC, which
provides for transferring pending cases to the call book,
is contrary to the statutory mandate, namely, that the
adjudicating authority is required to determine the duty
within the time frame specified by the legislature as far
as possible. Moreover, as discussed hereinabove, there
is no power vested in the CBEC to issue such
instructions under any statutory provision, inasmuch
(23 of 24) [CW-14492/2021]
as, neither section 37B of the Central Excise Act nor
rule 31 of the rules, envisage issuance of such
directions. The concept of call book is, therefore,
contrary to the provisions of the Central Excise Act and
such instructions are beyond the scope of the authority
of the CBEC. Transferring matters to the call book
being contrary to the provisions of law, the explanation
put forth by the respondents for the delay in concluding
the proceedings pursuant to the show cause notice
3.8.1998 cannot be said to be a plausible explanation
for not adjudicating upon the show cause notice within
a reasonable time. In view of the settled legal position,
as propounded by various High Courts, with which this
court is in full agreement, the revival of proceedings
after a long gap of ten to fifteen years without
disclosing any reason for the delay, would be unlawful
and arbitrary and would vitiate the entire proceedings."
As a consequence of the above discussion, we are of
the firm view that allowing continuance of the assessment
proceedings against the petitioners as a consequence of the
impugned show cause notices and the revival notices would be
absolutely unjustified. There is no material on the record of the
case to satisfy the court that the original show cause notices were
actually transferred to the Call Book and if so, by following the due
process as prescribed by the mandatory Circulars referred to
supra. No communication was ever made to the petitioners of the
decision to transfer the show cause notices to the Call Book and
thus, the petitioners would be acting under a bonafide and
reasonable expectation that the respondents had decided not to
proceed further with the assessment proceedings as a
consequence of the show cause notices and hence, there was no
(24 of 24) [CW-14492/2021]
reason for them to retain the material/evidence required to defend
against the impugned show cause notices. Even if it is assumed
that the matters were sent to the Call Book, then too the reason
for taking such a decision has not been explained in a satisfactory
manner. The case of M/s. J.K. Cement Works [Central Excise
Appeal No.12/2012], which is attributed to be the reason for the
decision to transfer the cases of the petitioners to the Call Book at
a highly belated stage, was registered in the year 2012, whereas
some of the original show cause notices were issued way back in
the year 2007. Thus, pendency of controversy in the said case
could not be the reason behind the decision for sending the cases
to Call Book.
As a consequence of the above discussion, the
impugned show cause notices, the revival notices issued to the
petitioners, as detailed in the table supra, and the consequential
orders, if any, deserve to be and are hereby quashed. The writ
petitions are allowed in these terms. No order as to costs.
(VINOD KUMAR BHARWANI),J (SANDEEP MEHTA),J
Pramod/-
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