Adherence to the show cause notice is a fundamental safeguard against arbitrary exercises of power, ensuring that authority remains tethered to the principles of justice and the rule of law.

JUDGMENT :

1. Heard counsel appearing on behalf of the parties.

2. This is a writ petition under Article 226 of the Constitution of India wherein the petitioner is aggrieved by the order dated August 20, 2019, passed in appeal by the Respondent No. 2/Additional Commissioner Grade-II (Appeal), Commercial/State Tax, Gautam Budh Nagar and the penalty order dated July 24, 2018, passed by the Respondent No. 3/Assistant Commissioner, State Tax/Commercial Tax, Gautam Budh Nagar.

3. Upon examination of the order dated August 20, 2019, passed in appeal, it appears that the plea that had been taken in the show cause notice at the time of detention, that is, that the vehicle was travelling to a destination not mentioned in the invoice, was accepted in appeal by the authorities. However, the appellate authority has imposed penalty on a different ground, that is, that the e-Way Bill had expired though the same was accompanied with goods.

4. It is pertinent to mention here that the Supreme Court on numerous occasions has upheld that the authorities cannot transgress the boundaries of the show cause notice. In Commissioner of Customs, Mumbai -v-Toyo Engineering Ltd., reported in (2006) 7 SCC 592, the Supreme Court emphasized upon the necessity of specifying the grounds for taking action against an individual in the show cause notice. The relevant paragraph of the judgment is delineated below:

“16. Learned counsel for the Revenue tried to raise some of the submissions which were not allowed to be raised by the Tribunal before us, as well. We agree with the Tribunal that the Revenue could not be allowed to raise these submissions for the first time in the second appeal before the Tribunal. Neither the adjudicating authority nor the Appellate Authority had denied the facility of the project import to the respondent on any of these grounds. These grounds did not find mention in the showcause notice as well. The Department cannot travel beyond the show-cause notice. Even in the grounds of appeals these points have not been taken.”

5. In Commissioner of Central Excise, Bhubaneshwar-v-Champdany Industries Ltd., reported in, (2009) 9 SCC 466, the Supreme Court held as follows:

“38. Apart from that, the point on Rule 3 which has been argued by the learned counsel for the Revenue was not part of its case in the show-cause notice. It is well settled that unless the foundation of the case is made out in the show-cause notice, the Revenue cannot in Court argue a case not made out in its showcause notice. (See Commr. of Customs v. Toyo Engg. India Ltd. [(2006) 7 SCC 592]) Similar view was expressed by this Court in CCE v. Ballarpur Industries Ltd. [(2007) 8 SCC 89] In para 27 of the said Report, learned Judges made it clear that if there is no invocation of the Rules concerned in the show-cause notice, it would not be open to the Commissioner to invoke the said Rules.”

6. Finally, in Commissioner of Central Excise, Chandigarh -v-Shital International, reported in (2011) 1 SCC 109, the Supreme Court, stated that unless the foundation of the case is laid in show-cause notice, the Revenue cannot be permitted to build up a new case against the assessee. The relevant paragraph of the judgment is delineated below:

“19. As regards the process of electrifying polish, now pressed into service by the Revenue, it is trite law that unless the foundation of the case is laid in the show-cause notice, the Revenue cannot be permitted to build up a new case against the assessee. (See Commr. of Customs v. Toyo Engg. India Ltd. [(2006) 7 SCC 592], CCE v. Ballarpur Industries Ltd. [(2007) 8 SCC 89] and CCE v. Champdany Industries Ltd. [(2009) 9 SCC 466]) Admittedly, in the instant case, no such objection was raised by the adjudicating authority in the show-cause notice dated 22-6-2001 relating to Assessment Years 1988-1989 to 2000-2001. However, in the show-cause notice dated 12-12-2000, the process of electrifying polish finds a brief mention. Therefore, in the light of the settled