Non-Communication Of SCN To Call Book Is Fatal; Bombay High Court Quashes SCNs Against ICICI Home Finance

The Bombay High Court, while quashing the show cause notices against ICICI Home Finance Company Ltd., held that non-communication of show cause notices transferred to the call book is fatal.

The bench of Justice K.R. Shriram and Justice Jitendra Jain observed that the reason why the show cause notices were transferred to the call book was because of the SLP pending in the Apex Court in Malabar Management Services Pvt. Ltd. The legality of the issues raised in Malabar Management Services Pvt. Ltd. has attained finality, and in Union of India & Anr. vs. . Intercontinental Consultants & Technocrats Private Limited, the issue is decided in favor of the assessee. Therefore, petitioner's case was kept in abeyance in view of the pending SLP in the Apex Court, and it is accepted that the issue covered the issue in petitioner's case as well. It would, therefore, serve no purpose in adjudicating the show cause notice.

The bench did not accept the suggestion made by the department that they should be permitted to proceed with the adjudication of show cause notices and remarked that it could be nothing but an exercise in futility.

The assessee/petitioner is a wholly owned subsidiary of ICICI Bank Limited. The assessee sought a declaration that the proceedings initiated pursuant to two show cause notices dated October 22, 2010 and October 21, 2011 for FY 2005–06 and FY 2006–07, respectively, be declared non-est.

The petitioner was not informed about the show cause notices being kept in abeyance and transferred to the call book.

The petitioner relied on the judgement in the case of Shreenathji Logistics vs. . Union of India & Ors., where the Court observed that if the show cause notice is being transferred to the call book, the party should be informed about the same.

The department contended that the reason why the show cause notices were transferred to the call book was because of the SLP pending in the Apex Court in Malabar Management Services Pvt. Ltd. The legality of the issues raised in Malabar Management Services Pvt. Ltd. has attained finality, and in Union of India & Anr. vs. . Intercontinental Consultants & Technocrats Private Limited, the issue is decided in favour of the assessee. Therefore, petitioner's case was kept in abeyance in view of the pending SLP in the Apex Court, and it is accepted that the issue covered the issue in petitioner's case as well.

The court held that the petitioner is not challenging transfer of show cause notices to call book and keeping the same in abeyance, but is only raising the ground that non-communication of transfer to call book is fatal to the case of respondents. There is no impediment to proceeding to decide the matter.

The court quashed the adjudication proceedings in relation to the SCNs due to the inordinate delay of 9 to 10 years.

Counsel For Petitioner: Jitendra Motwani

Counsel For Respondent: Asha A. Desai

Citation: 2024 LiveLaw (Bom) 305

Case Title: ICICI Home Finance Company Ltd. Versus UOI

Case No.: Writ Petition No.307 Of 2021

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