In a recent ruling of the Delhi High Court, the Division Bench comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora set aside an order issued on the basis of a flawed Show Cause Notice (SCN) to the assessee, M/s Victory Electric Vehicles International.
On behalf of the petitioner, it was contended that the impugned order was issued to the petitioner after an SCN that was issued within 15 days of the date of communication of the pre-notice consultation notice. It was put forward by the assessee that the obligation given under Section 28(1)(a) of the Customs Act, 1962 and Regulation 3, Manner of conducting pre-notice consultation was of mandatory nature.
It was observed by the court that “Such consultation is mandatory; an aspect which is driven home by use of the expression “the proper officer shall hold pre-notice consultation with the person chargeable with duty or interest …”. “ and it was held that the obligation to hold pre notice consultation in the manner prescribed, while observing the time frame is not optional but mandatory.
The bench also observed that the manner in which the pre-notice consultation was to be conducted, according to the Regulation 3 of the Pre-Notice Consultation Regulations, 2018, was not adhered to by the revenue.
The expiry of 15 days, as prescribed by the regulation, in the present case where the pre-notice consultation notice is issued 14-12-2021, would be on 29-12-2021. Here, the petitioner was denied the right to make his submission, in writing, concerning the ground(s) communicated to him in the pre-consultation notice; which, as indicated above, is required to be served prior to issuance of the SCN.
Additionally, the court observed that such provisions exist in law for the purpose of preventing the litigations from continuing and increasing, causing a burden to the already overburdened judiciary and it must be observed mandatorily.
For the reasons above mentioned, the Delhi High Court set aside the original order and disposed of the writ petition, saving the liberty of the revenue to reinitiate the proceedings afresh, in accordance with law.
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