Bombay HC directs to Refund of amounts paid during the Course of the Investigation [Read Order]

The Bombay High Court directs the department to refund the amount along with interest which was paid during the course of the investigation.

Shreenathji Logistics, the Petitioner is seeking a Writ of Certiorari, Writ of Mandamus or any other Writ order or direction under Article 226 of the Constitution of India quashing the impugned show cause notice dated 19th October 2012 primarily on the ground that there has been an inordinate delay in adjudicating the show cause notice. 

After the reply was filed to the show cause notice between 2018 and 2019, Petitioner wrote numerous letters to Respondent No.3-the adjudicating authority, to which there was not even an acknowledgement.  Since there was total silence on the part of Respondent No.3, Petitioner approached the Court by way of Petition.

Respondent alleged that Petitioner took repeated extensions to file a reply to the show cause notice and finally filed the reply only on 15th October 2014.  It was observed that if a party seeks an adjournment and an acceptable cause is shown, the Respondent could have given one extension or maybe two extensions, but not for two years.

The petitioner stated that certain amounts have been paid during the course of the investigation and those amounts should be directed to be refunded together with interest, if any, by law.

The HC observed that there is no satisfactory explanation as to why from October 2014 till now no adjudication has taken place.  The HC bench comprise of Justice K R Shriram & Justice A S Doctor held that if the show cause notice is being transferred to the call book, the party should be informed about the same.

In light of the facts, the HC observed that the adjudication of the impugned notices by Respondent No. 3 was bad in law and consequently the impugned order is also void. Respondent No. 3 had taken up the impugned notices for adjudication after a period of thirteen years from the date of issuance thereof and after the submission of the reply. This by all counts is well beyond the reasonable period in which Respondents were expected and required to act.

Further viewed that the Respondents did not inform Petitioner that the impugned notices had been transferred to call book this coupled with the sudden resurrection of the impugned notices after over a decade has impinged on procedural fairness and put Petitioners in a position of irretrievable prejudice.

Though Respondents have contended that the impugned notices were transferred to the call book as per the circular of the Board, even the Affidavit in Reply does not mention either the date on which the impugned notices were so transferred nor does it annex a copy of the circular upon which Respondents have placed reliance. 

Based on the absent production of the said circular and/or a proper explanation as to the contents of the same, Respondent’s contention that the impugned notices had been transferred to a call book based thereon is completely unintelligible and mere ipse dixit. The HC held that Petitioner was entirely justified in concluding that Respondents had abandoned the impugned show notices and quashed the show cause notice dated 19th October 2012.

The Court directed the department to return the amount deposited together with interest within 8 weeks from the date of the order being uploaded. 

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