The Bombay High Court has recently quashed a show cause notice-cum-demand order issued on 12 October 2009, holding that the same cannot be carried forward after such an inordinate delay.
The petitioner is a provider of services under the category of Steamer Agent service, Cargo Handling services Business Support Services, GTA and Business Auxiliary Services.
Pursuant to an audit conducted for the period 2004-05 to 2007-08, the Delhi office of the Petitioner was served with a Show Cause cum Demand Notice on 12 October 2009. Subsequently, the petitioner filed a reply, denying the allegations made in the impugned notice.
Thereafter, pending adjudication of the said show cause cum demand notice, the Petitioner, in respect of its offices across India, obtained Centralized Service Tax Registration.
Counsel for the Petitioner, Prasad Paranjape submitted that upon grant of centralized service tax registration, the Divisional Officer was obliged to send intimation to the respective jurisdiction Service Tax office-in-charge of the erstwhile branch to transfer the relevant records to its office for taking further action and to update the records, but despite the same, the files pertaining to the said show cause cum demand notice were not transferred to the Respondent
Thereafter, the revenue neither took any steps to transfer the said files nor to adjudicate the show cause cum demand notice.
After 11 years, on 9 September 2020, the hearing of the subject show cause cum demand notice was scheduled before the second respondent on 24 September 2020.
The petitioner challenged this as “ex-facie invalid, illegal, untenable and unsustainable in law”, referring to Section 74(3B) of the Finance Act, 1994 and submitted that the said provision at
the most prescribes a period of one year where it is possible to do so to complete the adjudication proceedings.
Senior Counsel for the revenue, Pradeep S. Jetly, along with Ram Ochani, submitted that the adjudication files relating to the Petitioner were received on 24 January 2019 only.
He further submitted that, although the CGST department had tried many times for conducting
personal hearing, but the Petitioner had not attended any personal hearing and therefore the adjudication of the order is pending till date.
The Division Bench of Justices Abhay Ahuja and Nitin Jamdar observed that respondents had delayed the transfer of proceedings from Delhi to Mumbai without any satisfactory explanation for this delay.
It was further noted that the proceedings ought to have been culminated within a reasonable time has not been done and that adjudicating the same now after an inordinate and unreasonable lapse of time would be detrimental and cause severe prejudice to the Petitioner.
Reiterating that “impugned show cause cum demand notice dated 12 October 2009 cannot be carried forward after such an inordinate delay”, the Bombay High Court quashed the same and allowed the writ petition.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
