AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 1818
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....f, be pleased to hold that the Assessment Order dated 21.08.2023 passed by the Cess Officer (Respondent No. 3) after a lapse of three years from the end of the year, i.e. on or before 31.03.2014, is barred by limitation as per Rule 25(5) of the Cess Rules; (b) that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to hold that the Assessment Order dated 21.08.2023 passed by the Cess Officer (Respondent No. 3) after a lapse of ten years from the date of issue of notice in Form-H is barred by limitation as has been held by this Hon'ble Court in the case Siemens Limited; (c) that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to hold that the Cess liabil....
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....gainst the very same respondent-Municipal Corporation. Such position was pointed out to the Court when both the proceedings were listed before a co-ordinate Bench of this Court, of which one of us (G. S. Kulkarni, J.) was a member, on 04 March 2024, when the following order was passed:- "The Petitioner has placed on record a decision of the Coordinate bench of this Court in the case of Siemens Limited v/s. State of Maharashtra (Writ Petition No. 3124 of 2020) decided on 3rd May, 2023 along with other batch of Petitions. 2 The learned Sr. Counsel for the Respondent-NMMC would submit that the relief as sought in the present Petitions would clearly stand covered by the said decision. 3 Mr. Sakhare would contend that Review Petition has been filed and the same would be taken up by the Review Bench on 12th March, 2024. 4 Stand over to 18th March, 2024 - HOB." 4. We find from the subsequent orders that the proceedings were adjourned on the ground that a review petition had been filed by the respondent-Navi Mumbai Municipal Corporation (for short, "Corporation"), seeking review of the judgment and order passed in Siemens Limited (supra). Learned coun....
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....nnual statement. Also on the even date, the Cess Officer also issued a Demand Notice (Form-J), calling upon the petitioner to pay the erroneously confirmed and exorbitant cess liability. 8. In these circumstances, the present petition is filed inter alia contending that under sub-rules (5) and (7) of Rule 25 of the Cess Rules, it was mandatory for the Commissioner to complete the assessment within three years from the end of the year in which the relevant period occurred. It is submitted that the impugned assessment order for the financial year 2010-11 is barred by limitation. In support of this contention, Ms. Patil, learned counsel for the petitioner, has drawn our attention to the decision of the co-ordinate Bench of this Court in Siemens Ltd. (supra). 9. In Siemens Ltd. (supra), the Division Bench, considering the purport of Rule 25 (3) and (4) of the Cess Rules 1996, held that, it could not have been intended that the assessment proceedings remain pending for a period of 10 years from the date of issuance of the initial notice in Form-H. It was held that the process of assessment was accordingly liable to be quashed on the ground of unreasonableness and failure to comple....
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....ed before the Hon'ble Supreme Court and while granting leave on 06.02.2017 it was directed that the Municipal Corporation would not take any coercive steps against the Members of the Small Scale Entrepreneurs Association for recovery of any interest or penalty under Rule 41 of the Rules of 1996. The pendency of these proceedings is hardly relevant so as to prevent the Commissioner from completing the process of assessment. Rule 41 of the Rules of 996 pertains to recovery of interest or penalty which is a stage subsequent to completion of assessment. Though such justification for non-completion of the assessment has not been put forward in the reply filed by the Municipal Corporation, since it was orally put forth as a justification for pendency of the assessment, we have considered the said submission. 17. We thus find from the aforesaid that it is necessary for the Municipal Commissioner to complete the assessment under Rule 25(3) of the Rules of 1996 either on the date specified in the notice issued in Form-H or as soon as may be thereafter on the basis of evidence produced by a registered dealer. On failure of a registered dealer to comply with the terms of notice issue....
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....nd not local body tax. The dealer having filed return under Rule 25 of the Rules of 1996, the assessment thereof was liable to be completed under the Rules of 1996. Recourse to the Local Body Tax Rules was totally unjustified. While it is true that quoting a wrong provision of law would not in a given case vitiate the proceedings if the Authority issuing the notice otherwise had authority to do so, the same however would clearly indicate absence of due application of mind to the material facts that were available on record. The aforesaid would thus indicate that even while issuing the reminder on 24.09.2019 the Municipal Corporation was not diligent in the matter and undertook recourse to Rule 33 of the Local Body Tax Rules instead of Rule 25 of the Rules of 1996. 19. We thus hold that failure to complete the process of assessment under Rule 25(3) and (4) of the Rules of 1996 for a period of more than ten years from the date of issuance of the initial notice in Form-H would render the process of assessment liable to be quashed on the ground of unreasonableness and failure to complete the assessment for no justifiable reason. On that basis the assessment for the period from....
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....tion on the part of the department to adjudicate the show cause notice would seriously nullify the noticee's rights causing irreparable harm and prejudice to the noticee. A protracted administrative delay would not only prejudically affect but also defeat substantive rights of the noticee. In certain circumstances, even a short delay can be intolerable not only to the department but also to the noticee. In such cases, the measure and test of delay would be required to be considered in the facts of the case. This would however not mean that an egregions delay can at all be justified. This apart, delay would also have a cascading effect on the effectiveness and/or may cause an abridgement of a right of appeal, which the assessee may have. Thus, for all these reasons, delay in adjudication of show cause notice would amount to denying fairness, judiciousness, non-arbitrariness and fulfillment 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 adjudica....
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....ibly be worse off for seeking a Constitutional remedy and thereby suffer an order to facilitate conclusion of the proceedings which, because of the inordinate delay in its conclusion, is most likely to work out prejudice to them. 16. Article 14 of the Constitution of India is an admonition to the State against arbitrary action. The State action in this case is such that arbitrariness is writ large, thereby incurring the wrath of such article. It is a settled principle of law that when there is violation of a Fundamental Right, no prejudice even is required to be demonstrated." 22. In Bombay Dyeing and Manufacturing Company Limited v. Deputy Commissioner of CGST and CX, DIV-IX, Mumbai Central GST Commissionerate 2022 (382) E.L.T. 206 (Bom.), a co-ordinate Bench of this Court observed on the prejudice which would be caused to the assessee if for a long period the show cause notice is not adjudicated. It was held that belated hearing of the show cause notice would amount to violation of principles of natural justice. Following are the observations of the Court: "10. It is not expected from the assessee to preserve the evidence/record intact for such a long p....
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....herein was called for hearing in the year 2006, no final order was passed immediately after hearing was granted to the petitioner. It is held that the respondents seem to have slipped into deep slumber thereafter. This Court while quashing and setting aside the show cause notices which were not decided after long delay was pleased to grant consequential relief to the petitioner therein by directing the respondents to return the amounts paid by the petitioner under protest during the course of investigation with interest @ 12% p.a. 26. This Court in case of The Bombay Dyeing and Manufacturing Company Limited Vs. Deputy Commissioner of CGST & CX (supra) after adverting to the judgment in cases of Parle International Ltd. v. Union of India (supra) and Reliance Industries Ltd. Vs. Union of India (supra) has held that when a show cause notice is issued to a party, it is expected that the same would be taken to its logical conclusion within a reasonable period so that a finality is reached. If the respondent would have informed the petitioner about the said Show-Cause Notice having been kept in call book in the year 2005 itself, the Petitioner would have immediately applied for ....