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of <h1>Show Cause Notices Quashed for Delay Over Seven Years Violating Section 73(4B) of Finance Act 1994</h1> <h3>M/s. Kamaladitya Construction (P) Ltd. Versus The Principal Commissioner of Central Goods and Service Tax and Central Excise, Ranchi. The Commissioner, Central Excise & Service Tax, Ranchi-II (Bokaro), The Superintendent (Adjudication) O/o Principal Commissioner of Central Goods and Service Tax and Central Excise, Ranchi</h3> M/s. Kamaladitya Construction (P) Ltd. Versus The Principal Commissioner of Central Goods and Service Tax and Central Excise, Ranchi. The Commissioner, ... Issues Involved:1. Legality and validity of the impugned Show Cause Notice dated 24.12.2014.2. Legality and validity of the notice of personal hearing dated 06.06.2022.3. Delay in adjudication and its compliance with the statutory time limits and principles of natural justice.Summary:1. Legality and Validity of the Impugned Show Cause Notice Dated 24.12.2014:The petitioner challenged the impugned Show Cause Notice dated 24.12.2014 on the grounds of delayed adjudication beyond the reasonable period of limitation, which offends Article 14 of the Constitution of India. The petitioner argued that the delay of more than 7 years in adjudicating the notice is contrary to the provisions of Sub-section (4B) of Section 73 of the Finance Act, 1994, which mandates a limit of six months to one year for completing adjudication proceedings 'where it is possible to do so.'2. Legality and Validity of the Notice of Personal Hearing Dated 06.06.2022:The petitioner received a notice of personal hearing dated 06.06.2022, fixing the hearing on 21.06.2022 for adjudication of the impugned Show Cause Notice dated 24.12.2014. The petitioner contended that the entire proceeding was kept in suspended animation for more than seven years without any reasonable explanation, causing prejudice and violating Article 14 of the Constitution.3. Delay in Adjudication and Compliance with Statutory Time Limits and Principles of Natural Justice:The petitioner argued that the words 'where it is possible to do so' under Section 73(4B) do not extend the time limit perpetually but are intended for extraordinary situations only. The delay in adjudication causes prejudice to parties and is contrary to Article 14. The petitioner cited several judgments to support the contention that the time limit for adjudication must be strictly adhered to unless there are reasonable grounds for delay.The respondent argued that the adjudication of the case is a quasi-judicial function, and there was no statutory time limit prescribed for passing the Adjudication Order. The delay was due to administrative constraints and changes in indirect taxation laws. The respondent cited judgments to support the view that the writ application is premature and that the petitioner has alternative remedies under the Finance Act, 1994.Court's Analysis and Conclusion:The court observed that Section 73(4B) provides for adjudication of show cause notices within six months to one year 'where it is possible to do so.' The words 'where it is possible to do so' are elastic only when there are reasonable grounds beyond the control of the adjudicating authority. The court held that the legislative intent behind inserting Sub-Section (4B) is to ensure adjudication within a reasonable time frame unless an extraordinary situation arises. The court noted that similar provisions exist under the Central Excise Act, 1944, and the Customs Act, 1962.The court emphasized that the law of limitation is intended to give certainty and finality to legal proceedings and to avoid indefinite litigation. The court cited several judgments to support the view that the period of limitation must receive strict construction.The court concluded that the delay of more than 7 years in adjudicating the impugned Show Cause Notice is unreasonable, arbitrary, and violates Article 14 of the Constitution. The court quashed the impugned Show Cause Notice dated 24.12.2014 and the notice of personal hearing dated 06.06.2022.Result:The instant application stands allowed, and the impugned Show Cause Notice dated 24.12.2014 and the notice of personal hearing dated 06.06.2022 are quashed and set aside. Pending I.A., if any, is also closed.
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