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TaxReply India Pvt Ltd
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Issuing numerous summons to petitioner satisfies the requirement of pre-SCN consultation in terms of paragraph 5.0 of CBIC Master Circular dated 10.03.2017: High Court


The grievance of the Petitioner is that the requirement of holding the mandatory pre-SCN consultation in terms of the Master Circular dated 10th March 2017 of the Department of Revenue, CBIC has not been complied with before issuance of show cause notice to the petitioner.


Relying on the decision of the Delhi High Court in Back Office IT Solutions Private Limited v. Union of India and Amadeus India Pvt. Ltd v. Pr. Commr. of C. Ex., S.T. and Central Tax and other decisions, it is urged by the Petitioner, that the impugned SCN ought to be set aside and a mandamus issued to Opposite Parties to first hold the pre-SCN consultation with the Petitioner.


Mr. R. Chimanka, learned Senior Standing Counsel appearing on advance notice for Opposite Party No.2 draws the attention of the Court to the fact that prior to the issuance of the impugned SCN, several summons were in fact issued to the Petitioner and to its Director to appear and furnish relevant information and yet many of the summons were not responded to.


Learned counsel appearing for the Petitioner does not dispute that the Petitioner may not have appeared pursuant to each of the summons issued, but refers to paragraph 3.8 of the SCN which sets out in detail the questions posed to the Petitioner/employee of the company and the response thereto.

Nevertheless, it is sought to be argued by learned counsel for the Petitioner that this still does not satisfy requirement of Paragraph 5.0 of the Master Circular and that it does not constitute a pre-SCN consultation.

Paragraph 5.0 of Master Circular Dated 10.03.2017

5.0 Consultation with the noticee before issue of Show Cause Notice: Board has made pre show cause notice consultation by the Principal Commissioner/ Commissioner prior to issue of show cause notice in cases involving demands of duty above Rs. 50 lakhs (except for preventive/ offence related SCN's) mandatory vide instruction issued from F No. 1080/09/DLA/MISC/15 dated 21st December 2015. Such consultation shall be done by the adjudicating authority with the assessee concerned. This is an important step towards trade facilitation and promoting voluntary compliance and to reduce the necessity of issuing show cause notice

View complete CBIC Master Circular dated 10.03.2017

High Court

The Court is unable to agree with the above submission. The purpose of paragraph 5.0 of the Master Circular is only that there should be “trade facilitation” and “voluntary compliance” in order to reduce the necessity of issuing a SCN. At the stage where numerous summons were issued to the Petitioner and to its Director, the Department had not yet the issues or the demand to be raised in the SCN. In effect what appears to have transpired pursuant to the summons issued was a ‘consultation’ where the documents produced by the Petitioner/employees of the Petitioner were examined and questions were posed to the notices to explain many aspects of such documents.

In the considered view of the Court, the requirement of there having to be a ‘consultation’ in terms of paragraph 5.0 of the Master Circular stands satisfied in the present case.

The Court is therefore not inclined to interfere at the present stage of the SCN.

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Jul 19, 2021

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