In the most recent versions of Xcode, simply edit the file /Applications/Xcode.app/Contents/SharedFrameworks/ContentDeliveryServices.framework/Versions/A/itms/java/conf/net.properties accordingly. I was able to change the following line (by default, it is set to false) and notarization started working from behind our proxy server:
java.net.useSystemProxies=true
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Developer Tools & Services
SubTopic:
Xcode
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