[The FM addressing the Chief Commissioners. Also seen in picture are Secretary (Revenue & Finance) Sunil Mitra and CBEC Chief Dutt Mazumder]
It all Starts with Show Cause Notice, Mr. FM
THE whole malady of litigation starts with the Show Cause Notice and any action, you wish to take should start here. The Show Cause Notice is to be issued by the Adjudication Authority. This itself creates a contradiction. How can an officer who issued the Show Cause Notice drop it? Later somebody may accuse him of not applying his mind while drafting the Show Cause Notice! Actually, most of the officers never do; the Show Cause Notices are drafted by the lower level officers and the draft is put up for approval and signature of the adjudicating authority.
Now once a Show Cause Notice is issued, nobody has the guts to drop it; even if there is an isolated soul somewhere ready to see reason and drop a Show Cause Notice, the Department will religiously go in appeal. This is what the adjudicating authority thinks, “Anyway this order will be appealed against – either by the Government or by the party; let it be appealed by the party; why should I invite suspicion from my boss?” And so the notice gets confirmed and from then the irritant litigation often goes all the way up to the Supreme Court. Sir, even after the Supreme Court gives its verdict, your officers are not prepared to accept the Apex Court decision as final. They will make you go to Parliament for a retrospective amendment for the simple reason that they did not know how to draft the law when they first did it. There are instances where retrospective legislation had to be done twice, as even the second time around, they got their drafting wrong.
And you tell your Chief Commissioners to avoid routine appeals! They will never listen to you. All the laudable campaigning by Finance Ministers on avoiding unwanted litigation over the years has fallen over deaf ears. You can provide some relief to the assessees, if you can scrap altogether adjudication by Departmental officers other than Commissioners – at least the assessees are saved from the torture of one stage of appeal and pre-deposit and make it mandatory that the order should be delivered to the party within a week of the hearing.
A thousand cases start with the first Show Cause Notice and it is here that you have to apply the brakes.
Five years ago, the Supreme Court in Hindustan Poles Corporation v Commissioner Of Central Excise, Calcutta – , observed,
Before issuance of show cause notices the Revenue must carefully take into consideration the settled law, which has been crystallized by a series of judgments of this Court. The Revenue must make serious endeavour to ensure that all those who ought to pay excise duty must pay but in the process the Revenue must refrain from sending of indiscriminate show cause notices without proper application of mind. This is absolutely imperative to curb unnecessary and avoidable litigation in Courts leading to unnecessary harassment and waste of time of all concerned including Tribunals and Courts.
Supreme Court or FM, the Field Marshalls have their own standards!