βIndirect Tax I Arbitration I Insolvency Advisory I Litigationsβ
Dated: 09.04.2024
Show Cause Notice (SCN) issued by Customs Department is void ab-initio where Pre-SCN consultation is not given to the assessee
The Jharkhand High Court has ruled that under the proviso to Section 28(1)(a) of the Customs Act, 1962, pre-SCN consultation is mandatory before issuing a show cause notice.
The petitioner argued that they were not provided with any information regarding the non-determination of duty or interest, as required by Section 28(9A). The proviso to Section 28(1)(a) mandates pre-show cause notice consultation. Despite this, the department sent the matter back for fresh adjudication, disregarding the fact that adjudication orders are time-barred under Section 28(1)(a), and show cause notices were issued without the required pre-notice consultation under Section 28(9)(a), which is fundamental to the case. Therefore, the entire proceeding is considered void ab initio nullity and vitiated.
The court observed that no pre-notice consultation had been offered. The respondent department admitted that pre-SCN consultation had not been conducted when issuing the challenged show cause notice. Consequently, the court, in nullifying the orders, emphasized that when a statute specifies a certain procedure, that procedure must be strictly followed.
Case Title: Bihar Foundry and Castings Limited Versus Union of India
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Source: Jharkhand High Court
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