Petition Dismissed for Delay; Inquiry Ordered into CGST Commissioner's Conduct Over Time-Barred Notice.

The Calcutta HC dismissed the petition challenging a show-cause-cum-demand notice under Section 73 of the Finance Act, 1994, citing the petitioner's delay of over 2 years and 4 months in filing. The Court criticized both the petitioner for the late challenge and the Commissioner of CGST for not timely addressing the notice, which allowed the proceedings to become time-barred. The HC permitted the Commissioner to resolve the pending notice within four weeks and ordered an inquiry into the Commissioner's conduct, emphasizing the need for adherence to statutory timelines.

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Issues involved: Challenge to show-cause-cum-demand notice under Section 73 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017 after significant delay.

The High Court of Calcutta heard the case where the petitioner challenged the show-cause-cum-demand notice dated 23rd December, 2020, under Section 73 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017. The petitioner filed the writ petition almost after 2 years and 4 months from the issuance of the notice. The Court observed serious lapses on the part of both the petitioner and the Commissioner of CGST and CX, Kolkata South Commissionerate. The Commissioner's delay in disposing of the reply to the notice was criticized, as it allowed the proceedings to become time-barred to the benefit of the petitioner and to the detriment of revenue. The Court dismissed the writ petition due to the petitioner's delay in approaching the court and attempting to take advantage of the Commissioner's inaction. However, the dismissal did not bar the Commissioner from disposing of the pending notice within four weeks from the date of the order.

The Court highlighted the petitioner's conduct in challenging the notice after an extensive delay and attempting to benefit from the Commissioner's failure to adjudicate the matter promptly. The Court criticized the petitioner for waiting over 2 years and 4 months to approach the court, stating that if the notice was without jurisdiction or unlawful, it should have been challenged immediately. The Court also condemned the Commissioner's lethargic attitude in not disposing of the reply to the notice, allowing the proceedings to become time-barred. The Court termed the conduct of the Commissioner as highly deprecable and emphasized the need for timely and efficient resolution of such matters.

The Court ordered the respondent/CGST Authority to forward a copy of the order to the Chief Commissioner of CGST for necessary action. The Chief Commissioner was directed to hold an inquiry into the Commissioner's conduct and fix responsibility for the delay in concluding the proceedings subsequent to the notice within eight weeks from the date of communication of the order. The Court stressed the importance of adherence to statutory timelines and the need for prompt and fair resolution of legal matters to uphold the interests of both parties involved.

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