TaxTMI 
TaxTMI 
04 Jun 2025
In indirect taxation—particularly under laws like the Goods and Services Tax (GST), Customs, Central Excise, or Service Tax—limitation periods are crucial in determining the legality and fairness of administrative actions. But what happens when no specific time limit is laid down for an action, such as issuing a show cause notice or making an adjudication?
Often the authorities, to overcome audit objections from the C&AG, issue notices or even without issuing notices issue orders and force the party to pay the amount confirmed. The only remedy to the party is to approach the High Court with a writ petition. One such case was the subject matter before the Hon’ble High Court of Punjab & Haryana when an exporter, M/s Venus Apparels questioned the appropriateness of issuing a SCN after 6-10 years after assessment period. The Hon’ble Court in M/S VENUS APPARELS AND OTHERS VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS, INLAND CONTAINER DEPOT, TUGHLAKABAD (EXPORT), NEW DELHI AND ANOTHER - 2024 (8) TMI 1556 - PUNJAB & HARYANA HIGH COURT followed the ratio laid down by the Apex Court in UNION OF INDIA & ANR. VERSUS M/S. ASIA EXPORTERS & ORS. - 2024 (8) TMI 678 - SC ORDER, refused to intervene against High Court order reported at RAGHAV INTERNATIONAL THROUGH PROPRIETOR VISHAL BHARATBHUSHAN JAIN & OTHERS VERSUS UNION OF INDIA & ANR. - 2023 (2) TMI 954 - GUJARAT HIGH COURT wherein High Court had quashed SCNs issued after 5-10 years from relevant assessment years by holding that no limitation was prescribed by Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995; hence, show cause notice had to be issued within reasonable period of three year and decided the case.
Against the said judgment the department had filed a special leave petition before the Apex Court in PRINCIPAL COMMISSIONER OF CUSTOMS & ANR. VERSUS M/S VENUS APPARELS & ORS. - 2025 (5) TMI 177 - SC ORDER The Apex Court dismissed the Appeal by the following order-Quote:
Following the order dated 19.10.2023 passed in Special Leave Petition (Civil) Diary No.39206 of 2023 (UNION OF INDIA & ANR. VERSUS M/S ASIA EXPORTERS & ORS. - 2023 (10) TMI 1435 - SC ORDER,) this Special Leave Petition also stands dismissed.
3. For ease of reference, the order dated 19.10.2023 in the aforesaid case is extracted as under:
"Delay in filing the special leave petition is condoned.
Having heard learned counsel for the petitioners and learned counsel for the respondent(s)-caveator, we find that this special leave petition arises out of Special Civil Application No.10699 of 2021 wherein, the period of assessment was 2011-2016. In respect of the said period, the date of issuance of the show cause notice is 24.03.2021 which means that the show cause notice was issued 5 to 10 years thereafter. There is no explanation whatsoever for the delay in issuance of notices to the respondents-herein.
In the circumstances, a challenge made to the show cause notices before the High Court was successful inasmuch as the action of the respondent authority was held to be belated and hit by delay and latches. Consequently, the show cause notices were quashed. We do not think that the impugned order would call for any interference in this case.
Hence, the special leave petition is dismissed-Unquote.
The question of reasonableness in issuing a Notice, when no limitation is prescribed in the statute is well settled by the Apex court by accepting a period of three years within which a notice need to be issued where no limitation is prescribed statutorily as in the case of Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995.
The Special leave petition in this case is against the policy of Government to reduce the litigation when a similar case was decided by the Apex Court. In the present case the same order is reproduced.
One can reasonably presume that the department will refrain from issuing Notices beyond a period of three years where there is no statutory limitation is prescribed or at least refrain from filing SLPs in the same matter.
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By Jayaprakash Gopinathan
Advocate