2023 (8) TMI 1153

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Central Excise & Anr. 2023(8) TMI 352-Bombay High Court wherein we observed that time and tide wait for none. It was observed that pendency of a show cause notice not only weighs against the legal rights and interest of an assessee, but also would adversely affect the interest of the revenue, which is a pure public interest, if prompt adjudication of the show cause notice is not undertaken. In the context of the present case, our observations we intend to underscore are that 'a lapse of time and certainly a long lapse of time is likely to cause irreversible changes frustrating the whole adjudication.' In our opinion, the present case is a fit case in the context of such observations as made by us. The peculiar facts of the case would unfold the saga. 4. Infrastructure Development Finance Co. Ltd. (IDFC Ltd.) is the original entity to whom the show cause notice in question dated 12 March 2010 was issued by the Commissioner of Service Tax, Mumbai - respondent No. 2. It appears from the record that the show cause notice having remained to be adjudicated, has weighed against the interest of the revenue on account of certain irreversible changes, taking place at the noticee's end, in....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on such letter, the petitioner was orally informed that the impugned show cause notice has been kept in the call book in the year 2010. However, no such reason or rationale was furnished for keeping the matter in the call book, at any point of time. Such contention of the petitioner is although disputed by the respondents. 8. In the above circumstances, the petitioner has stated that it was constrained to file an application with the respondents under Right to Information Act seeking copies of all the personal hearing notices, copy of intimation letter issued to erstwhile entity as also a copy of the show cause notice and other relevant documents. However, such information was not provided to the petitioner. In fact, petitioner's request was denied by a letter dated 23 June 2022 issued by the Assistant Commissioner, CGST & CE, Divison-VIII, Mumbai-South addressed to the representative of the petitioner Mr. Bipin Narendra Gemani. The contents of the said letter read thus: "To, Dt. 23 June, 2022 Mr. Bipin Narendra Gemani, 101/102, Satyanarayan Bhavan, 7/1, Dr. R. G. Thandani Marg, Worli, Mumbai-400018. Sir, Su....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....w cause notice dated 12.03.2010 (Exhibit A) and quashing and setting aside the same." 11. A reply affidavit is filed to the petition. Mr. Mishra, learned Counsel appearing for the respondents has made submissions opposing the petition. He has drawn our attention to the justification which is sought to be furnished by the department on such delayed adjudication by referring to the averments as made in paragraph 7 of the reply affidavit in which the respondent No. 2 has averred that IDFC was given personal hearing on 6 August 2013, however, record of personal hearing memo is not in the file of respondent no. 2. It is stated that hearing was again given on 9 August 2013, however, no one appeared for hearing for IDFC ltd. Therefore, another hearing was scheduled on 9 October 2013 when a noticee had requested for adjournment on or after 16 October 2013. It is stated that the noticee was heard on 20 February 2014 as per the record of personal hearing memo kept in the file. However, again the same was refixed on 17 March 2015 which was again adjourned at the request of the noticee to 14 April 2015, and thereafter, on 27 April 2015. Then again the noticee was heard on 21 May 2015. 12....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ce Tax-I and Service Tax-II in 2014, when files were transferred due to change in adjudicating authority, necessitating fresh personal hearing. 16. With reference to ground C1 to C2 of the petition the respondents state that the petitioner cited various Board's Circular and argued that once hearing is concluded, order in the case should be passed expeditiously, however, Section 73(4B) of the FA merely states that the cases where suppression etc are invoked may be decided within one year as far as possible. Thus the said Section does not make it mandatory to decide the cases within one year. So, there is nothing illegal if the case is decided beyond one year of the issue of SCN." (emphasis supplied) 14. In short, the contention of the respondent is to the effect that Section 73(4B) does not make it mandatory to decide the cases in one year and a notice can very well be decided beyond one year of its issuance. In facts of the case, even referring to the provisions of Section 73(4B) which are brought on the Statute book by an amendment made to the Finance Act, 1994 by the Amendment Act No. 2 of 2014, such contention as canvassed by the deponent of the reply affida....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... which do not make it possible for the adjudicating officer to conclude the proceedings of the show cause notice. This can be for reasons which are acceptable in law which a reasonable body of persons would accept to be absolutely justifiable, considering the duration of such period. This would certainly not mean that it can be an unexplained, unjustified, unreasonable and an inordinate delay. The same principle would apply to clause (b) of sub-section (4B) of Section 73. 17. We may also observe that when the legislature uses the words 'where it is possible to do so' in clauses (a) and (b), the legislature is conscious of some free play which is required to be made available to the adjudicating officer. However, such limited relaxation cannot be intended to mean that it would defeat the sanctity and purpose for which the period of six months and one year has been set out to clause (a) and (b) of sub-section (4B). The word 'where it is possible to do so' thus cannot be read to defeat the timelines of six months and one year as set out in clauses (a) and (b) of sub-section (4B). Also these words cannot be construed to mean that by use of such words a complete freedom is available ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., Section 73(4B)(a) and (b) would bring about, it would be an obligation on the Central Excise Officer to determine the amount of service tax due under subsection (2), within six months from the date of notice or within a period of one year from the date of notice, where it is possible to do so, in respect of cases falling under the proviso to sub-section (1) or the proviso to sub-section (4A). Thus, the statute itself prescribes for such period within which the service tax would be required to be determined. Sub-section (1) of Section 73 would also be relevant when it restricts the liability to service tax, to the period of five years under the situations falling below the proviso to sub-section (4) in cases of fraud, collusion, wilful mis-statement, suppression of facts, contravention of any of the provisions of Chapter V of the Finance Act, 1994. 16. We are thus of the opinion that there has to be a holistic approach and reading of the provisions of Section 73, when it concerns the obligation and repository of the power to be exercised by the concerned officer to recover service tax, in adjudicating any show cause notice, issued against an assessee considering the raiso....