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DELHI HIGH COURT
RAJIV SHAKDHER, TALWANT SINGH
Omaxe New Chandigarh Developers Pvt. Ltd. – Appellant
Versus
Union of India – Respondent
| Table of Content |
|---|
| 1. applicability of 2017 master circular. (Para 1) |
| 2. petitioners claim mandatory consultation occurred. (Para 2) |
| 3. court's analysis on pre-show cause notice consultation. (Para 3) |
| 4. directions issued to resolve consultation requirement. (Para 4 , 5) |
JUDGMENT
Rajiv Shakdher, J. (ORAL):--The limited issue which arises for consideration in the captioned writ petitions concerns the applicability of the instruction dated 21.12.2015 bearing F. No. 1080/09/DLA/MISC/15/757 [in short "2015 instruction"] and the Master Circular dated 10.03.2017 [in short "2017 Master Circular"], issued by Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, Government of India [presently, known as "Central Board of Indirect Taxes & Customs"]. In this context, in particular, the petitioners rely upon paragraph 5 of the 2017 Master Circular.
2. It is the submission of the petitioners that as per paragraph 5 of the 2017 Master Circular, the contesting respondents i.e. respondents nos. 2 to 5, who are represented by Mr. Satish Aggarwala in W.P.(C) 12653/2019 and Mr. Harpreet Singh in W.P.(C) 7842/2020, were mandatorily required to hold pre-show cause notice consultation
Mandatory consultation prior to issuing a show cause notice is required under the Master Circular, and failure to comply renders the notice invalid.
Point of Law : Sub-rule (1A) of Rule 142 (unamended) of the 2017 Rules: The proper officer shall, before service of notice to the person chargeable with tax, interest and penalty, under subsection (1....
Point of Law : Power so exercised by the authority is a statutory power conferred upon the respondent authorities under Section 73 of the Finance Act of 1994 and as such the issuance of the said show....
The Circular dated 11.11.2021 clarified the pre-show cause notice consultation requirement and operated retrospectively, influencing the Court's decision on the jurisdiction of the show cause notice.
Show cause notices for service tax demands over Rs.50 lakhs require mandatory pre-consultation per binding CBEC circulars under Sections 37B-37C; summons or inquiries insufficient substitute.
Court in exercising its powers under Article 226 has to mould the remedy to suit the facts of a case. If in a particular case a Court takes the view that the Income-tax Officer while passing an order....
The court established that pre-show cause notice consultation is mandatory for demands exceeding Rs.50 lakhs, and failure to comply renders the notice invalid.
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