2024 (3) TMI 408

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....of to quash and set aside the Show Cause Notice No. (i) 408/2009 dated 18.09.2009; (ii) Show Cause Notice No. 153/2010 and 12.04.2010; (iii) Show Cause Notice No. 91/2011 dated 01.04.2011; and (iv) Show Cause Notice No. 466 of 2011 dated 14.10.2011, pending for adjudication before the Respondent No. 2, due to inordinate delay of almost 11 years in its adjudication." 3. The Petitioner which was formerly known as APL (India) Pvt. Ltd., acts as a "steamer agent" for APL Co. PTE Limited, Singapore. The Petitioner provides various services to APL Co. PTE Limited, Singapore for which the Petitioner receives commission computed on the basis of net ocean freight earned by APL Co. PTE Limited, Singapore on import and export of cargo. The Petitioner provides these services from its offices across India, including Chennai and Mumbai. 4. During the relevant period various offices of the Petitioner were holding separate service tax registrations with their respective jurisdictional Commissionerate. Accordingly, the Chennai office of the Petitioner was holding Service Tax Registration No. AABCA273INST003 under the jurisdiction of the Commissioner of Service Tax, Chennai. 5. An Internal ....

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.... adjourned. 10. In the meanwhile, in terms of the Order dated 15th November, 2017 passed by the National Company Law Tribunal, APL (India) Pvt. Ltd., merged with the Petitioner. 11. It is the case of the Petitioner that, from 2013 to 2020, Respondent No. 2 did not take any steps for adjudication of the show cause notices. 12. Subsequently, by letters dated 4th December, 2020 and 31st December, 2020, the Petitioner was granted personal hearing in respect of the show cause notices issued by the Respondent No. 2 on the dates mentioned therein. By e-mails dated 15th December, 2020 and 11th January, 2021, the Petitioner informed Respondent No. 2 that, due to substantial lapse of time from issuance of the show cause notices, and change in management as well as office of the Petitioner, the Petitioner was facing significant challenges in collating the relevant documents required by it in support of its contention. 13. Thereafter, by a letter dated 14th January, 2021, the show cause notices were again scheduled for hearing on 27th January, 2021. 14. It is the submission of the Petitioner that the inordinate delay of almost 11 years in adjudication of the show cause notices r....

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....strict proof of proving that these letters had been issued to the Petitioner, the Respondents have not produced the said letters nor proved that the Petitioner had received those letters. In the absence of any such proof having been furnished by the Respondents, we would have to accept the statement in the Petition that, from 2013 to 2020, Respondent No. 2 did not take any steps for adjudication of the said show cause notices. 18. Further, even if it is accepted that the Respondents had issued the said letters in 2015 and 2017, even then, the Respondents have failed to give any explanation as to why they cannot complete the adjudication in respect of the said show cause notices which had been issued in the year 2009, 2010 and 2011 till the filing of the Petition. 19. Further, the Respondents were not prevented from completing the adjudication proceedings ex-parte if the Petitioner, as alleged by the Respondents, did not attend the so called personal hearing granted by the Petitioner in 2015 and 2017. No explanation has been given by the Respondents for the inordinate delay in adjudication of the show cause notices. 20. In our view, the delay in completion of the adjudicati....

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....lso be relevant when it restricts the liability to service tax, to the period of five years under the situations falling below the proviso to subsection (4) in cases of fraud, collusion, willful 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 raison d'etre of the provision. It is hence expected that the approach and expectation from the officer adjudicating the show cause notice would be to strictly adhere to the timelines prescribed by provisions of the Act, as there is a definite purpose and intention of the legislature to prescribe such time limits, either under Section 73(4B) of six months and one year respectively or of five years under Section 73(1). 17. In our opinion, in the facts of the present case, such requirement and obligation the law would mandate is completely over....

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.... in adjudication of show cause notice would amount to denying fairness, judiciousness, non-arbitrariness and fulfilment of an expectation of meaningfully applying the principles of natural justice. We are also of the clear opinion that arbitrary and capricious administrative behaviour in adjudication of show cause notice would be an antithesis to the norms of a lawful, fair and effective quasi judicial adjudication. In our opinion, these are also the principles which are implicit in the latin maxim "lex dilationes abhorret", i.e., law abhors delay. 21. ..... 25......... 26. We are also not inclined to accept the contention of Mr. Adik that the department be permitted to adjudicate the show cause notice, by referring to the order dated 10 July, 2023 passed by the Supreme Court in the case of Commissioner, GST and Central Excise, Commissionerate II (supra). In our opinion, the directions as made in such order are required to be read in the facts and circumstances of the case before the Court. It also cannot be said that any concrete proposition of law has been laid down in the said order to the effect that even if there exists a gross, unjustifiable and ino....