Facts of the Case

This is a Central Excise Act case decided entirely on pre-GST law, though the petitioner (formerly Essel Packaging Ltd., now EPL Ltd.) and the respondent Commissionerate today operate under 'CGST & CX' nomenclature. A show cause-cum-demand notice dated 14 February 1997 — roughly 25 years before the petition was heard — had been issued to the petitioner by the Commissioner, Central Excise, Mumbai-III. The petitioner sought to quash the notice and claim a refund of Rs. 10,69,666/- deposited under protest during the investigation, with 12% interest. At the hearing, the department's own counsel candidly informed the Court that the case papers could not be located in the office of the Principal Commissioner; a letter dated 28 March 2023 from the Additional Commissioner to various Commissionerates in Mumbai Zone confirmed that Thane Rural Commissionerate had 'no such SCN' on its records at all.

Issues Involved

  1. Whether a show cause notice issued 25 years earlier, and effectively untraceable within the department's own records, could still be adjudicated.
  2. Whether the petitioner was entitled to a refund of the amount deposited under protest, with interest, upon quashing of the notice.

Petitioner's Arguments

  • Given settled principles on delayed adjudication of show cause notices, a notice unadjudicated for 25 years ought to be quashed.
  • The amount of Rs. 10,69,666/- deposited under protest during the investigation should be refunded with 12% interest from the date of deposit.

Respondent's Arguments

  • The department repeatedly sought adjournments to trace the case papers, which ultimately could not be located in the office of the Principal Commissioner.
  • A formal letter confirmed that even the successor Commissionerate had no record of the notice ever having been received.

Court Order / Findings

  • The Bombay High Court (G.S. Kulkarni & Jitendra Jain, JJ.) held it had become impossible for the department to adjudicate the notice, both because of its own admitted inability to trace the case records and applying the settled principles from its recent decisions (including Coventary Pvt. Ltd. and the batch of cases on delayed adjudication) as well as the earlier Division Bench ruling in Premier Ltd. vs Union of India — where a 25-year delay in adjudicating a notice was itself held to be illegal, a view since affirmed by the Supreme Court.
  • The Court held that authorities cannot be liberal in repeatedly granting adjournments and failing to adjudicate a notice over such an extraordinarily long period.
  • The show cause-cum-demand notice dated 14 February 1997 was quashed and set aside, and the department was directed to refund Rs. 10,69,666/- with interest at 12% per annum from the date of deposit till actual refund.
  • Rule was made absolute; no costs.

Important Clarification

This is a Central Excise (pre-GST) ruling — not a GST decision — but it is a striking illustration of just how far courts have gone in refusing to allow adjudication of decades-old notices, particularly where the department itself cannot even locate the file. It reinforces the broader principle (also applied in the parallel IDFC First Bank ruling from the same Bench on the same day) that indirect-tax notices cannot be left pending indefinitely.

Sections Involved

  • Central Excise Act, 1944
  • Constitution of India — Article 226

Decision – In Favour of

Decided in favour of the petitioner; the 1997 notice was quashed and a refund with interest was ordered. This is a Central Excise ruling and does not decide any question of GST law.

Case Details

Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Case No.: Writ Petition No. 597 of 2023
Coram: G. S. Kulkarni & Jitendra Jain, JJ.
Date of Judgment: 22 August 2023

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