Bombay HC Urges Strict Action on Long-Pending Show-Cause Notices by Central Government Officers

The Bombay High Court recently expressed concern over instances where show-cause notices issued by officers of the Central government under Central Acts to citizens are left unresolved for several years.

Condemning this trend, a bench of Justice GS Kulkarni and Justice Jitendra Jain urged the Union Ministry of Finance to take strict action against officers who are not diligently fulfilling their responsibilities.

The division bench took note of numerous petitions before the Court that highlighted officers’ failure to address show-cause notices that were issued up to a decade ago.

“In our considered view, the Ministry of Finance should address this matter seriously in relation to officers who are neglecting their crucial duties and thereby mishandling public revenue,” the order stated.

The Court’s observation came while allowing a petition challenging a show-cause notice dated October 21, 2010, which was issued 13 years ago. The Court recalled its earlier order from July 25, 2023, in which it had flagged the lackadaisical approach of officers in timely adjudication of show-cause notices, emphasizing its detrimental impact on revenue interests.

Therefore, the Bench directed the Union Ministry of Law and Justice to share copies of both orders with the Secretary of the Finance Ministry.

“We are of the opinion that a copy of these judgments should be forwarded to the secretary in the Ministry of Finance, to acquaint him with the legal approach that adjudicating officers, endowed with significant powers to issue show-cause notices and handling public revenue, should adopt. This will ensure an effective adjudication process for show-cause notices unless an existing mechanism already covers this. We would be remiss in our duty if we do not urge the Finance Secretary to address such concerns,” the order noted.

The bench was hearing a petition filed by UPL Limited, a company, which alleged substantial deficiencies in the issuance of the challenged show-cause notice by the Commissioner of Central Goods and Services Tax. The tax authorities’ response acknowledged that the delay could not be justified.