TMI Blog2023 (8) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribe such time limits, either under Section 73(4B) of six months and one year respectively or of five years under Section 73(1). In the facts of the present case, such requirement and obligation the law would mandate is completely overlooked by the officer responsible for adjudicating the show cause notice. We are not shown any provision, which in any manner would permit any authority to condone such inordinate delay on the part of the adjudicating officer to adjudicate show cause notice. There can be none, as the legislature has clearly intended to avoid uncertainty, which otherwise can emerge. Thus, what would become applicable are the settled principles of law as laid down in catena of judgments, that the period within which such adjudication should happen is as mandated by law and in any case it needs to be done within a reasonable period from the issuance of the show cause notice. Further, whether such period is a reasonable period would depend upon the facts and circumstances of each case. An inordinate delay is seriously prejudicial to the assessee and the law itself would manifest to weed out any uncertainty on adjudication of a show cause notice, and that too k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nomic Zone. On 31 March, 2009, the petitioner addressed a letter to Sunny Vista Pvt. Ltd. specifying that as per the agreement Rs. 20 crores was to be paid by Sunny Vista as a deposit of refundable nature. The time of refund of such deposit was to be agreed mutually after three years. Accordingly, on 31 March, 2009, Sunny Vista deposited Rs. 20 crores as agreed. On 21 October, 2009, the petitioner filed its Service Tax Return in Form ST-3 for the period October, 2008 to March, 2009 declaring the deposit of Rs. 20 crores under exempt category, being the services provided to the Special Economic Zone being exempt. 4. On 28 September, 2010, summons was issued by the Superintendent (Anti Evasion) to the petitioner calling upon the petitioner to furnish balance sheet, receipt ledger, contracts, invoices, Agreement and details of amount received from Sunny Vista before the concerned officer on 1 October, 2010. After the receipt of said letter, the petitioner by its letter dated 1 October, 2010 sought time to compile and submit the documents. Such documents were submitted on 6 October, 2010. Thereafter, on 12 November, 2010, statement of Mr. Kamlesh Desai was recorded by the Superinten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation under the orders passed by this Court on 18 April, 2015, approving the merger, in the proceedings of Company Scheme Petition No. 25 of 2015 and connected proceedings. 7. It is the case of the petitioner that after a substantial passage of time of almost 10 years from the issuance of the show cause notice, a notice dated 29 December, 2021 was received by the petitioner from the adjudicating officer to attend a personal hearing on 10 January, 2022 at 1 p.m. The petitioner by its letter dated 7 January, 2022 addressed to the Joint Commissioner, CGST Central Excise, requested for an adjournment. The petitioner thereafter addressed a letter dated 4 February, 2022 to the adjudicating officer, contending that the show cause notice be dropped on the ground of inordinate delay. The petitioner has contended that despite the receipt of its letter dated 4 February, 2022, again a notice dated 11 February, 2022 was issued by the department to the petitioner calling upon the petitioner to remain present for hearing on 24 February, 2022. The petitioner replied to such notice by its letter dated 19 February, 2022 reiterating that the show cause notice be dropped on the ground of inordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of such contention, Mr. Raichandani has placed reliance on the decision of a co-ordinate Bench of this Court in ATA Freight Line (I) Pvt. Ltd. vs. Union of India Ors. Writ Petition No. 3671 of 2022, against which Special Leave Petition (Civil) Diary No. 828 of 2023 filed by the Union of India came to be dismissed; in CMA-CGM Agencies (India) Pvt. Ltd. vs. Union of India Ors. Writ Petition No. 1313 of 2021; decision of this Court in Shreenathji Logistics vs. Union of India Ors. Writ Petition No. 540 of 2020; in Sushitex Exports (India) Ltd. Ors. vs. Union of India Anr. 2022 SCC Online Bom. 191; in Sanghvi Reconditioners Pvt. Ltd. vs. Union of India, through the Secretary, Department of Revenue Ors. 2017 SCC Online Bom 9781 ; in Reliance Industries Ltd. vs. Union of India 2019 (368) E.L.T. 854 (Bom.) and in Parle International Ltd. vs. Union of India 2021 (375) E.L.T. 633 (Bom.). 9. Mr. Raichandani would submit that all these decisions would show a consistent view being taken by the Court that the show cause notice cannot be adjudicated after inordinate delay and the same would be required to be dropped, accepting the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021 dated 8 March, 2023. Mr. Adik has also placed reliance on an order passed by the Supreme Court in Commissioner, GST and Central Excise Commissionerate II Ors. vs. M/s. Swati Menthol and Allied Chemicals Ltd. Anr. SLP(C) No. 20072 of 2021 dated 10 July, 2023, to contend that on a similar plea being raised by the assessee, the Supreme Court had permitted adjudication of the show cause notice. Mr. Adik has also made submissions on merits of the show cause notice. It is, therefore, his submission that the petition deserves to be dismissed. 11. We have heard learned counsel for the parties. We have also perused the record. 12. At the outset, it needs to be observed that the show cause notice was issued to the petitioner on 16 March, 2012 and the same was replied by the petitioner by a detailed reply dated 24 January, 2013. After this, the legal status of the petitioner also underwent a change in view of the amalgamation order passed by this Court in the company proceedings, inasmuch as by an order dated 18 April, 2015 passed by this Court, the erstwhile S H Services Pvt. Ltd. stood merged under the scheme of amalgamation with the petitioner. Admittedly, from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words eighteen months , the words five years had been substituted. Explanation : Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of eighteen months or five years, as the case may be. (1A) Notwithstanding anything contained in sub-section (1), (except the period of eighteen months of serving the notice for recovery of service tax) the Central Excise Officer may serve, subsequent to any notice or notices served under that sub-section, a statement, containing the details of service tax not levied or paid or short levied or short paid or erroneously refunded for the subsequent period, on the person chargeable to service tax, then, service of such statement shall be deemed to be service of notice on such person, subject to the condition that the grounds relied upon for the subsequent period are same as are mentioned in the earlier notices. (1B) Notwithstanding anything contained in sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of six months and one year respectively or of five years under Section 73(1). 17. In our opinion, in the facts of the present case, such requirement and obligation the law would mandate is completely overlooked by the officer responsible for adjudicating the show cause notice. We are not shown any provision, which in any manner would permit any authority to condone such inordinate delay on the part of the adjudicating officer to adjudicate show cause notice. There can be none, as the legislature has clearly intended to avoid uncertainty, which otherwise can emerge. Thus, what would become applicable are the settled principles of law as laid down in catena of judgments, that the period within which such adjudication should happen is as mandated by law and in any case it needs to be done within a reasonable period from the issuance of the show cause notice. Further, whether such period is a reasonable period would depend upon the facts and circumstances of each case. 18. An inordinate delay is seriously prejudicial to the assessee and the law itself would manifest to weed out any uncertainty on adjudication of a show cause notice, and that too keeping the same pending for such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the law is well settled that when a power is conferred to achieve a particular object, such power has to be exercised reasonally, rationally and with objectivity. It was observed that it would amount to an arbitrary exercise of power if proceedings initiated in 1997 are not taken to their logical conclusion even after a period of over two decades. The Court agreed with the view taken in Parle International Ltd. (supra) that the proceedings should be concluded within a reasonable period, and if the proceedings that are not concluded within a reasonable period, the Court considering such facts, may not allow the proceedings to be carried any further. Referring to the contentions on behalf of the respondent that the respondent should be granted the liberty to conclude the proceedings, it was observed that except for the petitioners who had approached the Court to have the impugned show-cause notice set aside invoking the writ jurisdiction of the Court of this Court, the show cause notice would have continued to gather dust. The Court observed that the petitioners, in such circumstances, cannot possibly be worse off in seeking a constitutional remedy and thereby suffer an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice belatedly is in violation of natural justice. 23. In ATA Freight Line (I) Pvt. Ltd. (supra), a Division Bench of this Court considering the decisions in Parle International Ltd. (supra), Bhagwandas S. Tolani vs. B.C. Aggarwal Ors. 1983 (12) E.L.T. 44 (Bom.) and Reliance Industries Ltd. (supra) held that a show cause notice issued a decade back should not be allowed to be adjudicated by the Revenue merely because there is no period of limitation prescribed in the statute to complete such proceedings. The relevant observations of the Court are required to be noted, which reads thus: 24. This Court in case of Parle International Ltd. (supra) after considering the identical facts and after adverting to the judgment in cases of Bhagwandas S. Tolani (supra), Sanghvi Reconditioners Pvt. Ltd. (supra) and Reliance Industries Ltd. (supra) held that that a show-cause notice issued a decade back should not be allowed to be adjudicated upon by the revenue merely because there is no period of limitation prescribed in the statute to complete such proceedings. Larger public interest requires that revenue should adjudicate the show-cause notice expeditiously and within a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to quash and set aside dated 16th September 2005 in that matter. The principles of law laid down by this Court in the above referred judgment would apply to the facts of this case. We are respectfully bound by the principles of law laid down by this Court in the said judgment. We do not propose to take a different view in the matter. 28 .. 29. In our view, since the respondents were totally responsible for gross delay in adjudicating the show cause notices issued by the respondents causing prejudice and hardship to the petitioner and have transferred the show cause notices to call book and kept in abeyance without communication to the petitioner for more than 7 to 11 years, the respondents cannot be allowed to raise alternate remedy at this stage. Be that as it may, no order has been passed by the respondents on the said show cause notices. The question of filing any appeal by the petitioner therefore did not arise. 24. A Special Leave Petition filed by the Union of India against the decision the Division Bench in ATA Freight Line (I) Pvt. Ltd. also came to be rejected by the Supreme Court by order dated 10 February, 2023, being proceedings of SLP (C) Diary No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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