Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
>
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 Case Laws - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
  • Title Only
  • Head Notes
  • Citation
Party Name: ?
Party name / Appeal No.
Law:
---- All Laws----
  • ---- All Laws----
  • GST
  • Income Tax
  • Benami Property
  • Customs
  • Corporate Laws
  • Securities / SEBI
  • Insolvency & Bankruptcy
  • FEMA
  • Law of Competition
  • PMLA
  • Service Tax
  • Central Excise
  • CST, VAT & Sales Tax
  • Wealth tax
  • Indian Laws
Courts: ?
Select Court or Tribunal
---- All Courts ----
  • ---- All Courts ----
  • Supreme Court - All
  • Supreme Court
  • SC Orders / Highlights
  • High Court
  • Appellate Tribunal
  • Tribunal
  • Appellate authority for Advance Ruling
  • Advance Ruling Authority
  • National Financial Reporting Authority
  • Competition Commission of India
  • ANTI-PROFITEERING AUTHORITY
  • Commission
  • Central Government
  • Board
  • DISTRICT/ SESSIONS Court
  • Commissioner / Appellate Authority
  • Other
Situ: ?
State Name or City name of the Court
Landmark: ?
Where case is referred in other cases
---- All Cases ----
  • ---- All Cases ----
  • Referred in >= 3 Cases
  • Referred in >= 4 Cases
  • Referred in >= 5 Cases
  • Referred in >= 10 Cases
  • Referred in >= 15 Cases
  • Referred in >= 25 Cases
  • Referred in >= 50 Cases
  • Referred in >= 100 Cases
From Date: ?
Date of order
To Date:
TMI Citation:
Year
  • Year
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
  • 2010
  • 2009
  • 2008
  • 2007
  • 2006
  • 2005
  • 2004
  • 2003
  • 2002
  • 2001
  • 2000
  • 1999
  • 1998
  • 1997
  • 1996
  • 1995
  • 1994
  • 1993
  • 1992
  • 1991
  • 1990
  • 1989
  • 1988
  • 1987
  • 1986
  • 1985
  • 1984
  • 1983
  • 1982
  • 1981
  • 1980
  • 1979
  • 1978
  • 1977
  • 1976
  • 1975
  • 1974
  • 1973
  • 1972
  • 1971
  • 1970
  • 1969
  • 1968
  • 1967
  • 1966
  • 1965
  • 1964
  • 1963
  • 1962
  • 1961
  • 1960
  • 1959
  • 1958
  • 1957
  • 1956
  • 1955
  • 1954
  • 1953
  • 1952
  • 1951
  • 1950
  • 1949
  • 1948
  • 1947
  • 1946
  • 1945
  • 1944
  • 1943
  • 1942
  • 1941
  • 1940
  • 1939
  • 1938
  • 1937
  • 1936
  • 1935
  • 1934
  • 1933
  • 1932
  • 1931
  • 1930
Volume
  • Volume
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
TMI
Example : 2024 (6) TMI 204
By Case ID:

When case Id is present, search is done only for this

Sort By: ?
Even if Sort by Date is selected, exact match will be shown on the top.
RelevanceDate
    No Records Found
    ❯❯
    MaximizeMaximizeMaximize
    0 / 200
    Expand Note
    Add to Folder

    No Folders have been created

      +

      Are you sure you want to delete "My most important" ?

      NOTE:

      Case Laws
      Showing Results for :
      Reset Filters
      Results Found:
      AI TextQuick Glance by AIHeadnote
      No Records Found

      Case Laws

      Back

      All Case Laws

      Showing Results for :
      Reset Filters
      Showing
      Records
      ExpandCollapse
        No Records Found

        Case Laws

        Back

        All Case Laws

        Showing Results for : Reset Filters
        Case ID :

        📋
        Contents
        Note

        Note

        -

        Bookmark

        print

        Print

        Login to TaxTMI
        Verification Pending

        The Email Id has not been verified. Click on the link we have sent on

        Didn't receive the mail? Resend Mail

        Don't have an account? Register Here

        <h1>Show cause notices quashed after 17-year delay violates natural justice and constitutional principles</h1> <h3>M/s. DXC Technology India Private Limited, (Formerly known as M/s. Covansys (India) Private Limited), Represented by its authorized signatory Mr. Raman Sethi Versus The Joint Commissioner of GST and Central Excise, The Assistant Commissioner of GST and Central Excise, The Commissioner of GST and Central Excise, Chennai</h3> M/s. DXC Technology India Private Limited, (Formerly known as M/s. Covansys (India) Private Limited), Represented by its authorized signatory Mr. Raman ... 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered by the Court in these writ petitions are:(a) Whether the adjudication of the Show Cause Notices issued in 2008, after a delay of more than 17 years, is arbitrary and violative of the principles of natural justice and Article 14 of the Constitution of India;(b) Whether the petitioner's liability to pay service tax on information technology services rendered prior to the amendment of the Finance Act, 1994, with effect from 16.05.2008, is valid;(c) Whether the delay in adjudication caused by the transfer of the Show Cause Notices to the Call Book in 2011 is justified and whether it bars the petitioner from challenging the delay;(d) The applicability and interpretation of relevant circulars and government instructions regarding the adjudication of show cause notices and audit objections;(e) The effect of judicial precedents relating to delay in adjudication of show cause notices and the consequent abatement of proceedings;(f) Whether the petitioner's reliance on various High Court and Supreme Court decisions supports the quashing of the impugned show cause notices;(g) Whether the petitioner's predecessors' mergers and changes in corporate identity affect the continuation of the show cause proceedings.2. ISSUE-WISE DETAILED ANALYSISIssue (a): Delay in adjudication and violation of principles of natural justice and Article 14Relevant legal framework and precedents: The Court referred to a series of judicial decisions, including those from this Court and other High Courts, which have held that an inordinate and unexplained delay in adjudication of show cause notices renders the proceedings arbitrary and violative of Article 14 of the Constitution. Specifically, the decision in J.Sheik Parith (2020) 374 E.L.T. 15 (Mad.) was highlighted, where delay exceeding 8 years without justification led to abatement of proceedings.Court's interpretation and reasoning: The Court observed that more than 17 years had elapsed since the issuance of the impugned Show Cause Notices in 2008. The Revenue failed to provide any justifiable or reasonable explanation for this delay. The Court held that such delay offends the principle of equality and fairness guaranteed under Article 14, making the continuation of proceedings arbitrary.Key evidence and findings: The Show Cause Notices were issued in 2008, but the case was transferred to the Call Book only in 2011, and no adjudication has occurred since. The petitioner had replied promptly to the notices, and the delay was solely attributable to the Revenue's inaction.Application of law to facts: Applying the principle that delay without explanation vitiates proceedings, the Court found that the delay here was excessive and unjustified, warranting quashing of the show cause notices.Treatment of competing arguments: The Revenue argued that the case was transferred to the Call Book in 2011 and that Board circulars mandated adjudication of such cases. However, the Court found these arguments insufficient to justify the delay and held that the delay itself rendered the proceedings arbitrary.Conclusion: The Court concluded that the delay in adjudication was arbitrary and violative of Article 14, and therefore the show cause proceedings could not be continued.Issue (b): Liability to pay service tax on IT services rendered prior to 16.05.2008Relevant legal framework and precedents: Service tax liability on information technology services was introduced by Finance Act, 2008 with effect from 16.05.2008, by insertion of Section 65(105)(zzzze) in the Finance Act, 1994. Prior to this date, such services were not taxable under service tax laws.Court's interpretation and reasoning: The petitioner's case was that the services rendered prior to 16.05.2008 were not liable to service tax, and therefore the show cause notices demanding tax for earlier periods were without basis.Key evidence and findings: The petitioner's predecessors became liable to service tax only from 16.05.2008. The impugned show cause notices related to periods before this date, making the demand untenable.Application of law to facts: Since the Finance Act amendment was prospective, the Court accepted that service tax could not be levied for IT services rendered before 16.05.2008.Treatment of competing arguments: The Revenue did not seriously contest this point but focused more on the delay issue.Conclusion: The Court found merit in the petitioner's contention that the demand for service tax on IT services rendered prior to 16.05.2008 was not sustainable.Issue (c): Effect of transfer to Call Book and delay in adjudicationRelevant legal framework and precedents: Board circulars, including Circular No.1023/11/2016-CX dated 08.04.2016, regulate the treatment of audit objections and show cause notices transferred to the Call Book. The circular directs that show cause notices related to audit objections vetted by the Comptroller and Auditor General (CAG) may be adjudicated following prescribed procedures.Court's interpretation and reasoning: The Revenue contended that the case was transferred to Call Book in 2011 and that the Board's instructions permitted adjudication thereafter. The petitioner argued that transfer to Call Book caused delay and that the delay was arbitrary.Key evidence and findings: The Court noted the absence of any explanation from the Revenue for the delay between 2011 and 2025 in adjudicating the show cause notices. The circulars did not justify indefinite delay.Application of law to facts: The Court held that mere transfer to Call Book does not justify inordinate delay in adjudication. The delay must be reasonable and justified, which was not the case here.Treatment of competing arguments: The Court rejected the Revenue's reliance on Board circulars as a shield against the constitutional challenge to delay, emphasizing that administrative instructions cannot override constitutional guarantees.Conclusion: The delay caused by transfer to Call Book without adjudication for over a decade was arbitrary and unacceptable.Issue (d): Applicability of circulars and government instructions on adjudicationRelevant legal framework and precedents: Various circulars were cited, including Circular No.20/92-CX.6 (1992), F.No.275/17/2015-CX.8A (2015), Circular No.1053/02/2017-CX (2017), Circular No.732/48/2003-CX (2003), and Circular No.1023/11/2016-CX (2016). These circulars emphasize expeditious adjudication of show cause notices and provide guidelines for handling audit objections.Court's interpretation and reasoning: The Court acknowledged these circulars but noted they impose a duty on the Department to adjudicate expeditiously rather than justify delay. The circulars do not provide immunity from constitutional scrutiny.Key evidence and findings: The circulars were relied upon by the Revenue to justify proceeding with adjudication despite delay.Application of law to facts: The Court held that administrative circulars cannot override the constitutional mandate of fairness and timely adjudication.Treatment of competing arguments: The Court distinguished between procedural instructions and constitutional rights, holding the latter prevail.Conclusion: Circulars emphasize expeditious adjudication but do not validate inordinate delay.Issue (e): Effect of judicial precedents on delay and abatement of proceedingsRelevant legal framework and precedents: The Court extensively referred to precedents from various High Courts and the Supreme Court, including decisions from Gujarat, Delhi, Bombay, Allahabad, and Madras High Courts. These decisions consistently hold that delay in adjudication without justifiable cause results in abatement of proceedings and quashing of show cause notices.Court's interpretation and reasoning: The Court aligned with the established principle that delay beyond a reasonable period violates natural justice and equity, leading to abatement.Key evidence and findings: The petitioner's reliance on these precedents was found well-founded.Application of law to facts: The Court applied these precedents to the facts, finding the delay excessive and unjustified.Treatment of competing arguments: The Revenue's contention that some cases were pending with the CAG or subject to other procedural delays was rejected as insufficient justification.Conclusion: The Court held that the show cause notices must be quashed due to delay, consistent with judicial precedents.Issue (f): Effect of mergers and corporate identity changes on continuation of proceedingsRelevant legal framework and precedents: The petitioner's predecessors were merged into the present petitioner company over time. The Court considered whether such corporate changes affect the validity of the show cause notices and proceedings.Court's interpretation and reasoning: The Court noted that while mergers may affect the party's identity, they do not justify indefinite pendency of proceedings. The petitioner's liability is derivative from predecessors, but delay in adjudication is not excused by corporate restructuring.Key evidence and findings: The petitioner's predecessors had similar show cause notices adjudicated or dropped in other jurisdictions, supporting the petitioner's case.Application of law to facts: The Court found no justification for continuing show cause notices after mergers and prolonged delay.Treatment of competing arguments: The Revenue did not dispute the mergers but relied on procedural grounds to continue proceedings.Conclusion: Corporate mergers do not justify delay or continuation of stale proceedings.3. SIGNIFICANT HOLDINGS'Where the period of more than 8 years had lapsed from the issuance of show cause notice and there was no proper or justifiable explanation from the Revenue for the delay in their adjudication, show cause proceedings have to abate.''The continuation of show cause proceedings long after their issuance have to be held to be arbitrary and offending under Article 14 of the Constitution of India.''Administrative circulars emphasizing expeditious adjudication cannot override the constitutional mandate of fairness and timely adjudication.''Transfer of show cause notices to the Call Book does not justify inordinate delay in adjudication.''Service tax on information technology services became leviable only with effect from 16.05.2008; demands for prior periods are unsustainable.'Final determination: The writ petitions were allowed, and the impugned Show Cause Notices dated 29.09.2008 and 05.11.2008 were quashed due to inordinate and unjustified delay in adjudication violating principles of natural justice and Article 14. No costs were imposed.

        Topics

        ActsIncome Tax
        No Records Found