Delhi High Court: Voluntary Statement Recorded Before Senior Intelligence Officer Will Not Constitute Pre-show cause notice Consultation

Delhi High Court: Voluntary Statement Recorded Before Senior Intelligence Officer Will Not Constitute Pre-show cause notice Consultation

The Delhi High Court (HC) ruled in the case titled Extension Developers Pvt. Ltd. & Anr. (Petitioners) v. Union of India & Ors. (Respondents) that the "voluntary statements" recorded before the Senior Intelligence Officer cannot constitute pre-show cause notice consultation.

The HC division bench comprising of Justices Rajiv Shakdher and Talwant Singh stated that consultation entails discussion and deliberation. It stated that "It cannot be said that voluntary statements made by the officials of the petitioners before the Senior Intelligence Officer would constitute a pre-show cause notice consultation, as stipulated under paragraph 5 of the 2017 Master Circular."

The factual background of the case is that the petitioner has raised the issue regarding the applicability of the instruction dated 21 December 2015 bearing and the Master Circular dated 10 March 2017, issued by Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, Government of India which is present, known as Central Board of Indirect Taxes & Customs.

The petitioners put reliance on paragraph 5 of the 2017 Master Circular, which provided that the contesting respondent authorities were mandatorily required to hold pre-show cause notice consultation with the petitioners prior to initiation of the proceedings under the Finance Act, 1994.

The respondents contended that pre-show cause notice consultation had occurred and, in that context, reliance is placed upon the statements made by the petitioners' officials, before the Senior Intelligence Officer under Section 14 of the Central Excise Act, 1944, as made applicable to Service Tax matters vide Section 83 of the Finance Act, 1994.

The matter was listed before the HC and it issued various directions while disposing of the writ petition, which is discussed under-

- The contesting respondents will serve an appropriate communication on the petitioner indicating therein the date, time, and venue at which they intend to convene a meeting for holding pre-show cause notice consultation;

- The concerned officer will accord a personal hearing to the authorized representative of the petitioner;

- The concerned officer would allow the petitioner to make submissions with regard to the merits of the matter including the aspect pertaining to the jurisdiction.

- The concerned officer will, after hearing the authorized representative of the petitioner, pass an order as to whether or not it is a fit case for continuing with the proceedings in accordance with the mandate of the law including the Finance Act, 1994.

- If the concerned officer concludes that it is a fit case in which proceedings should continue against the petitioner, then, he would take a decision with regard to whether or not the impugned show cause notice should be revived or a fresh show-cause notice should be issued in consonance with the decision, that would be rendered by the Supreme Court in SLP in case of Amadeus India Pvt. Ltd. v. Principal Commissioner, Central Excise, Service Tax, and Central Tax Commissionerate.