TMI Blog2023 (4) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... one within a reasonable period. Section 73 of the Act, as in force at the material time, did not stipulate any period within which the show cause notice was required to be adjudicated. It merely stipulated the period within which the show cause notice was required to be issued. However, there is no cavil that the authority conferred with the jurisdiction is required to exercise the same within a reasonable period - In the facts of the present case, it is not necessary for this Court to examine the validity of the procedure of placing the matter in the Call Book as it is apparent that there is a gross delay on the part of respondent no. 1 and there are no justified reasons for the same. In Sanghvi Reconditioners Pvt. Ltd. v. Union of India through the Secretary, Department of Revenue Ors. [ 2017 (12) TMI 906 - BOMBAY HIGH COURT ], the Court had observed that the larger public interest requires that the Revenue and its officials adjudicate the show cause notice expeditiously and within a reasonable time. The Court had further observed that the term reasonable time is flexible enough and would depend upon the facts and circumstances of each case . However, there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dication of the impugned show cause notice, after the lapse of almost thirteen years? Factual Context 4. The petitioner is a partnership firm registered under the Indian Partnership Act, 1932 and engaged in the business of executing civil construction works. The petitioner claims that it executes contracts for civil works awarded by authorities, institutions and other entities including the Central Government and the State Governments. The petitioner was awarded the contract for construction of residential flats by the Housing Board Haryana, Gurugram (hereafter the HBH ). 5. On 28.07.2005, the petitioner commenced work in respect of the contracts entered with the HBH for construction of 256 residential flats, in Sector 43, Gurugram, Haryana (hereafter the Project ). The petitioner submits that as on date, the Project stands completed. 6. On 02.07.2008, an investigation was initiated against the petitioner by the Anti-Evasion Branch of respondent no. 1 regarding non-registration of the petitioner with the Service Tax Department and the non-payment of service tax. 7. According to respondent no. 1, the petitioner was liable to pay service tax for rendering taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice. 11. On 16.06.2010, respondent no. 1 issued notice, scheduling a hearing on 30.06.2010 at 13:00 hrs inviting the petitioner to present its submissions. The petitioner could not appear on the said date and the proceedings were rescheduled to 02.07.2010. The petitioner appeared on the said date and advanced submissions in support of his contention. 12. The petitioner did not hear from the respondents thereafter till it received a notice dated 02.08.2022. The petitioner claims that since it did not hear from respondent no. 1, it assumed that respondent no. 1 had accepted its contentions and closed the proceedings. 13. Respondent no. 1 claims that in terms of the CBEC Circular No. 719/35/2003-CX dated 26.05.2003, it had immediately after the hearing held on 02.07.2010, placed the matter in the Call Book with the approval of the Commissioner. 14. Respondent no. 1 resurrected the proceedings by issuing the impugned letter dated 02.08.2022 informing the petitioner that a personal hearing was scheduled on 10.08.2022 at 11:00 AM and calling upon him to appear for representing the case either personally or through an authorized representative along with written submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e competent authority . The Circular No. 162/73/1995-CX dated 14.12.1995, also noted that the Commissioner Customs and Central Excise, Delhi had requested for inclusion of certain other categories of cases that could be placed under the said Call Book , namely, (i) Cases in which the Department has gone in appeal to the appropriate authority; (ii) Cases where injunction has been issued by Supreme Court / High Court / CEGAT, etc; (iii) Cases where audit objections are contested; (iv) Cases where the Board has specifically ordered the same to be kept pending and to be entered into the call book . 24. According to the respondents, the procedure of placing a case in the Call Book is well accepted. In the present case, respondent no. 1 had done so, as the issue involved in the impugned show cause notice was pending consideration before the Supreme Court in Commissioner of Central Excise Service Tax, Karnataka v. M/s Sobha Developers Limited Civil Appeal Nos.9819-9820/2010 which was decided on 17.01.2017. 25. The question whether the procedure of placing matters in the Call Book is permissible is a contentious one. The Gujarat High Court in Siddh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings for more than four and a half years thereafter. 30. As noticed above, the impugned letter seeking to recommence the proceedings was issued on 02.08.2022. There are no justifiable reasons to condone the said delay after the reason for placing the matter in abeyance pendency of the appeal in the case of M /s Sobha Developers Limited 3 had ceased to exist. 31. It is also relevant to note that the questions sought to be raised by the Revenue in the case of M/s Sobha Developers Limited 3 were covered by an earlier decision of the Supreme Court in Commissioner of Central Excise Customs, Kerala v. Larsen and Toubro Ltd. (2016) 1 SCC 170. In that case, the Supreme Court had authoritatively held that prior to the enactment of the Finance Act, 2007 by virtue of which Section 65(105)(zzzza) of the Act was introduced and Section 67 of the Act was amended a composite contract was not taxable. The order dated 17.01.2017 passed by the Supreme Court dismissing the Revenue s appeal in M/s Sobha Developers Limited3 clearly indicates that the Revenue was seeking reconsideration of the decision in Larsen and Toubro Ltd. 32. Thus, this Court finds it difficult t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a taxable person must know where it stands after issuance of show-cause notice and submission of reply. If for more than 10 years thereafter there is no response from the departmental authorities, it cannot be faulted for taking the view that its reply had been accepted and the authorities have given a quietus to the matter. 36. In ATA Freight Line (I) Pvt. Ltd. v. Union of India Ors. 2022 SCC OnLine Bom 648 , the Bombay High Court in somewhat similar circumstances where the show cause notice had been kept in abeyance for more than seven to eleven years allowed the petition. The Bombay High Court also noticed that if the petitioner was informed about the show cause notice being kept in the Call Book , the petitioner would have applied for an appropriate relief by filing for appropriate proceedings. It was not expected for the assessee to preserve evidence and records for a long period of time. It is material to note that the Revenue had filed a Special Leave Petition Union Of India Ors. v ATA Freight Line (I) Pvt. Ltd.: SLP(C) Diary No.828/2023 before the Supreme Court, which was dismissed by an order dated 10.02.2023. The said order reads as under: De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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