By TIOL News Service

HYDERABAD, NOV 15, 2016: THE appellant filed a Writ Petition challenging the jurisdiction of DRI to issue Show Cause Notice in the light of Delhi High Court ruling in case of M/s Mangali Impex Ltd., v. Union of India - 2016-TIOL-877-HC-DEL-CUS. But before the Petition was filed, the Show Cause Notice had already been adjudicated, culminated into an Order of adjudication and the order of adjudication has also been confirmed by the Tribunal, the High Court and the Supreme Court. The Petitioner contended that the Punjab & Haryana High Court in case of Rajinder Arora and others v. Union of India and others held that in the light of the decision of the Supreme Court in Sayed Ali and in the light of the decision of the Delhi High Court in Mangali Impex Ltd., the show cause notice, the adjudication order as well as the consequential recovery proceedings were non- est and void abinitio.

After hearing both sides, the High Court held:

+ The show cause notice has already culminated in an Order of adjudication and the order of adjudication has also been confirmed by the Tribunal, the High Court and the Supreme Court. The doctrine of merger has come into play and the show cause notice is not available any more for the petitioner to challenge.

+ But unfortunately, the Delhi High Court as well as the Punjab & Haryana High Court have not considered the issue from the point of view of merger. It is needless to point out that the doctrine of merger is a common law doctrine founded on principles of propriety in the hierarchy of justice delivery system. The underlying principle behind the doctrine of merger is that there cannot be more than one decree.

+ The issue can be looked at from another aspect also. Today, the effect of allowing the writ petition and setting aside the show cause notice would be to set at naught, the order of adjudication, the judgment of CESTAT, the judgment of this Court and the order of Supreme Court. What cannot be achieved by the petitioner directly cannot be achieved by them indirectly.

+ The contention that all proceedings founded upon a show cause notice that was inherently lacking in jurisdiction, would be non- est , null and void, is perhaps right as a simple statement of a proposition of law. But it is not without exceptions. If this theory of nullity and voidity is accepted, all proceedings initiated before 08-04-2011, which have already culminated in orders of adjudication and pursuant to which recoveries have been made, are also to be deemed as non-est. Therefore, the Commissionerates of Excise throughout the country can today be flooded with applications for refund of the duty paid in pursuance of the orders of adjudication passed on the basis of such show cause notices. The theory of nullity and voidity cannot be extended to such an extent as to lead to such disastrous consequences.

+ It is not the case of the petitioner that they challenged either the impugned show cause notice or the Order-in-Original at the relevant point of time on the ground that the show cause notice was issued by a person not assigned the role of a proper officer. The petitioner had challenged the show cause notice and the order of adjudication on other grounds, which stand rejected up to Supreme Court. Therefore, the principle of finality to litigation would put a seal on the present attempt on the part of the petitioner to reopen the issue all over again.

(See 2016-TIOL-2789-HC-AP-CUS)