Limitation, Jurisdiction, and Pre-SCN Consultation in Customs and Service Tax Law

Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 04.08.2026

Limitation, Jurisdiction, and Pre-SCN Consultation in Customs and Service Tax Law

This article provides a detailed comparative analysis of two significant sets of judgments: (1) the Jharkhand High Court’s decision in the case of M/s Bihar Foundry & Castings Ltd., and (2) the Madras High Court’s common judgment on the pan-India jurisdiction of Central Excise/GST officers and the requirement of pre-show cause notice (SCN) consultation.

1. Core Legal Issues

Bihar Foundry & Castings Ltd. (Jharkhand HC)

• Limitation in Customs Proceedings: The primary issue was whether the finalization of provisional assessments and subsequent issuance of SCNs and adjudication orders under the Customs Act, 1962, were barred by limitation.
• Mandatory Pre-SCN Consultation: The petitioner challenged the validity of SCNs and orders for non-compliance with the mandatory pre-SCN consultation as per Section 28(1)(a) of the Customs Act and related regulations.
• Delayed Finalization: The court examined whether the delay (6–9 years) in finalizing provisional assessments and issuing SCNs was legally sustainable.

Pan-India Jurisdiction (Madras HC)

• Jurisdiction of Central Excise/GST Officers: The main issue was whether the Central Board of Excise and Customs (CBEC) could confer pan-India jurisdiction on Central Excise Officers for investigation and adjudication under the Service Tax/GST regime.
• Validity of Notification: The challenge was to Notification No. 22/2014-ST, which empowered officers with all-India jurisdiction.
• Pre-SCN Consultation: The appellants argued that pre-SCN consultation, as recommended by departmental circulars, was mandatory and its absence vitiated the proceedings.

2. Judicial Reasoning and Findings

Jharkhand HC (Bihar Foundry)

1. Limitation is Mandatory:
   • The court held that after the 2018 amendment, the six-month limitation for adjudication under Section 28(9)(a) of the Customs Act is mandatory.
   • The omission of the phrase “where it is possible to do so” made the time limit strict, not directory.
2. Pre-SCN Consultation:
   • The court found that pre-SCN consultation is a mandatory requirement under the Customs Act and related regulations.
   • Non-compliance with this requirement renders the SCN and subsequent proceedings void ab initio.
3. Delayed Finalization:
   • The court relied on CBIC instructions and judicial precedents to hold that finalization of provisional assessments after 6–9 years is unreasonable and unsustainable.
   • The court quashed the orders and SCNs issued beyond the reasonable period.

Madras HC (Pan-India Jurisdiction)

1. Pan-India Jurisdiction Upheld:
   • The court upheld the validity of Notification No. 22/2014-ST, confirming that the Board can assign pan-India jurisdiction to Central Excise/GST officers.
   • The court relied on Supreme Court precedents, holding that “local limits” can be defined as all-India, and such delegation is not ultra vires.
2. Pre-SCN Consultation Not Mandatory:
   • The court held that departmental circulars recommending pre-SCN consultation are not mandatory and cannot override statutory provisions.
   • The absence of pre-SCN consultation does not vitiate the SCN or subsequent proceedings.
3. Remedies:
   • The court directed that parties aggrieved by SCNs or orders should pursue statutory appeals rather than writ petitions, except in cases of jurisdictional challenge.

3. Key Contrasts

Aspect	Jharkhand HC (Bihar Foundry)	Madras HC (Pan-India Jurisdiction)
Limitation	Strictly enforced; delay fatal to proceedings	Not the central issue
Pre-SCN Consultation	Mandatory; non-compliance voids proceedings	Not mandatory; absence does not vitiate SCN
Jurisdiction	Focus on limitation and procedure	Upheld pan-India jurisdiction of officers
Remedy	Quashed delayed and procedurally defective orders	Directed use of statutory appeals for factual disputes

4. Legal Principles Established

• Jharkhand HC: Emphasizes strict adherence to statutory limitation and procedural safeguards (like pre-SCN consultation) in customs proceedings. Any deviation, especially after legislative amendments, is fatal to the validity of proceedings.
• Madras HC: Affirms the Board’s power to confer pan-India jurisdiction and clarifies that departmental circulars (like those on pre-SCN consultation) are recommendatory, not binding, unless incorporated into the statute.

5. Practical Implications

• For Taxpayers:
  • In customs matters, taxpayers can challenge proceedings if limitation or mandatory procedures are not followed.
  • In service tax/GST matters, challenges to jurisdiction based on officer location are unlikely to succeed; procedural lapses in pre-SCN consultation alone are insufficient to quash proceedings.
• For Revenue Authorities:
  • Must strictly comply with statutory timelines and mandatory procedures in customs matters.
  • Can rely on pan-India jurisdiction for investigations and adjudication in service tax/GST, but should ensure fairness and clarity in proceedings.

These judgments collectively clarify the boundaries of procedural and jurisdictional challenges in indirect tax litigation, reinforcing the importance of statutory compliance and the limits of administrative circulars.

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Source: Jharkhand High Court, Madras High Court

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