Bombay High Court bench of Justice Abhay Ahuja and Justice Nitin Jamdar quashed and set aside the service tax show cause demand notice on the grounds of 7 years delay.
The National Company Law Tribunal merged APL (India) Pvt. Ltd with APL (India) Pvt. Ltd.
The petitioner, CMA-CGM Agencies (India) Pvt. Ltd., is engaged inter alia in the business of providing services under the category of Steamer Agent service, Cargo Handling service, Business Support Service, GTA and Business Auxiliary service and has offices across India for providing the said services.
The Petitioner that during the relevant period, various offices of the Petitioner were holding separate service tax registrations with their respective jurisdictional Commissionerate.
Pursuant to an audit conducted for the period 2004-05 to 2007-08, the Delhi office of the Petitioner was issued a Show Cause cum Demand Notice dated 12 October 2009. Further the Petitioner filed its reply to the said show cause cum demand notice denying the allegations made therein.
According to Paranjape, the petitioner’s counsel, the petitioner was asked for a personal hearing about the topic show cause or demand notice seven years after the date of communication of centralised registration.
Furthermore the notice of hearing was issued around eleven years after the date of the said show cause cum demand notice and failure to adjudicate despite the inordinate delay has rendered the entire proceedings ex-facie invalid, illegal, untenable and unsustainable in law.
According to Jetly, the respondent’s counsel, the petitioner’s adjudication files were received on January 24, 2019, and the petitioner was then sent personal hearing letters with dates of August 3, 2020, August 10, 2020, August 24, 2020, and September 9, 2020.
Further submitted that although the Central Goods and Services Tax (CGST) department had tried many times for conducting personal hearing, the Petitioner had not attended any personal hearing and therefore the adjudication of the order is pending till date.
The bench observed in Parle International Ltd. vs. Union of India has observed that proceedings should be concluded within a reasonable period and proceedings that are not concluded within a reasonable period, which the Court on the facts of each case has to consider, may not be allowed to proceed further.
The HC opined that the action on the part of a constituent of State has to be with responsibility and not caprice.
Furthermore, the phrase “reasonable period” calls for a flexible rather than a rigid interpretation in light of the specific facts of each case.
However, the Petitioner claims a period of more than eleven years, or even seven years, and the Respondents have not sufficiently explained why they were unable to conclude the proceedings other than their own delay. In our opinion, this is wholly unreasonable, and the reasons given in the affidavit-in-reply cannot be accepted.
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