Know your Show Cause Notice

Published on 20 Oct 2016 by Team

The Constitution of India provides that an accused has the Fundamental Right to defend himself when he is charged with any criminal allegations, on the basis of a principle followed in India that holds a person “innocent until proven guilty”. Show cause notice is formed closely on the same principal where a wrongdoer is given an opportunity to present himself with a reasonable excuse because of which such a wrongful act was committed.

What is a Show Cause Notice?

Show Cause Notice is a notice sent to any person by any authority i.e. government, employer, government employee’s, passport authority etc, in order to get a reply back with a reasonable cause as to why a particular action shouldn’t be taken against him in regard to the defaulting act done by him. Generally, it is used in order to provide the defaulter with a chance to present himself with a reasonable cause because of which he committed the wrongful act. Talk to the best civil lawyers in India to send a reply to a show cause notice.

Show Cause Notice In Indian Penal Code

The Court recently dealt with a petition under Section 482 CrPC praying for quashing of complaint against petitioner under Sections 195 and 211 IPC that is, for fabricating false evidence and false charge of offence with an intent to injure, respectively.

In a case titled State v. Sanjay, under Sections 376(2)(g), 366, 120-B and 506 of the IPC, a show-cause noticewas issued by the court to the petitioner for prosecuting her for the commission of the offence under the abovementioned provisions in January, 2015 ordering the complaint to be filed against her in the Court of CJM, Rohtak.

However, this order was set aside on appeal with an observation as well as an instruction that the petitioner is allowed to file the reply to the show-cause notice. Petitioner filed reply praying that she may be forgiven by having pity on her so that her future career is not spoiled and notice in hand may kindly be withdrawn. Not convinced with this reply, the Court passed the order in September 2015 for filing the complaint. So, a complaint was filed by the court praying for the quashing of which the present petition has been filed. The best civil advocates in India can be hired to deal with a show cause notice.

Considering the chain of facts and highlighting the reply filed by the petitioner to the notice under S. 340, the Court clarified that there was nothing illegal in it and did  not amount to miscarriage of justice at all, for the opportunity of being heard was given to the petitioner as she was allowed to file reply to the show-cause notice. It is the non-acceptance of the forgiveness sought that has led to the filing of the complaint in the Court. Inderjit Singh, J accordingly held that there is no merit in the case and accordingly, dismissed the petition. [Meenakshi v. State of Haryana]

Show Cause Notice When Excise Duty (Indirect Tax)

Excise duty is imposed on the goods produced and manufactured throughout the territory of India. The Excise duty is also known as CENVAT or Central Value Added Tax (based on the “tax credit” provided to every person who adds value to goods and has paid its part of tax).As per Section 11A of the Central Excise Act, 1944, the tax authorities issued a “Show- Cause Notice” against an Assessee when the tax has been Not paid, Short Paid, CENVAT credit is wrongly availed, misclassification or for the purpose of imposition of penalties. The notice issued by the tax authorities comes with a timeline like in other cases, towards the fulfilment of the non-compliance or payment of taxes.

Show Cause Notice w.r.t Service Tax

The Service Tax in India is governed by the Finance Act, 1994 and the Service Tax, Rules. The Notices issued under the Service Tax regime is for obvious reasons not much different in process pertaining to the Excise Duty. The Authorities have the power to issue a Show Cause Notice to the Assessee, who is a part of the Service industry in India as a Service provider in any form and derives its livelihood from this industry.

Under Section 73(1) of the Finance Act, 1994, the Authorities may issue a show cause notice when they have a reason to believe that the concerned person has Short paid/not paid the service tax or the payment has not been levied or short levied or erroneous refund has happened. The Show Cause Notice will have to be issued within a period of maximum 18 months from the relevant date by the concerned officer.

The limitation period of 18 months will be extended further to 5 years in cases where the service tax has not been levied or paid or has been short-levied or short paid or erroneously refunded by reason of fraud, collusion, misstatement (willful), suppression of facts, contravention of any of the provisions of the law or of the rules made thereunder with intent to evade payment of service tax. 

Section 73(2) of the Act states that the concerned officer has the authority to issue a statement after the issuance of the first notice to the exclusion of a period of 18 months, but the subsequent period towards the same reasons as mentioned above. The same statement shall be deemed to be an equivalent of a service of notice on the Assessee. 

The notice served by the Officer concerned (mainly on the Deputy, Principal or Chief Commissioner level as defined in Section 2(b)of Central Excise Act, 1944 (the Central Excise Officer has the authority in case of Service Tax) must be complete and precise. In case there are any discrepancies with regard to the tax demanded and the basis of the demand made by the authorities concerned, the assessee in such a case must highlight the same in reply to notice received.

Omission to be explained

Whenever you are served with any Show Cause Notice then there is no need to panic, until and unless you have a reasonable and a valid excuse because of which there was an omission of any necessary act or commission of any wrongful act. Whenever any Show Cause Notice is served then it contains the details of the act which is committed by you or was omitted, and also they mention the specific time-frame between which they want you to revert back to them by sending the reply on the address mentioned in the notice with a reasonable cause for the same.

If you fail to reply to the notice within the specified time frame mentioned in it then the authority has right to take strict action against you. If due to unforeseen circumstances or any other reasonable reason you weren’t able to send the reply then in such case you can file the reply to the concerned authority along with stating your reasonable cause of the delay.

Filing Reply For Show Cause Notice

While filing the reply it should always be kept in mind that your excuse should look reasonable (though not actually true). The reply should always be drafted in such a way that if any layman would read it he should find the same as reasonable. Moreover, always sound humble in your reply and also sound sorry for the same. Lastly, be always very careful to file the reply within the specified time limit mentioned in the notice.

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