The Supreme Court of India confirmed order of the Bombay High Court quashing Show Cause Notice (SCN) due to gross delay in adjudicating Show Cuse Notice seeking payment of service tax on freight difference.
The petitioner, ATA Freight Line (I) Pvt Ltd, that during the period between 2006 and 2015, the petitioner was engaged in the activity of buying and selling space in vessel. The petitioner recovered the expenses from its clients to facilitate export/import of goods for providing cargo handling/ freight service incurred expenses.
Show cause notices were issued to the petitioner. Petitioner replied. Show cause notices were not adjudicated for a period of 7-11 years. The petitioner approached seeking closure report. The Petitioner was then informed that the show cause notices have been kept in the call book in as much as an appeal on similar issue is pending before the High court.
The Petitioner filed writ petition under Article 226 of the Constitution of India seeking quashing of the show cause notices.
The issue involved in the subject show cause notices in the writ petition are regarding non-payment of service tax on freight difference. The said show cause notices had been initially transferred to call book in the light of appeal filed by department in this Court against the order of CESTAT in case of M/s.Greenwich Meridian Logistics (I) Pvt Ltd.
The Bench comprising Justice RD Dhanuka and Justice SM Modak observed that “It is held that the respondent having issued the Show-Cause notice, it is their duty to take the said Show-Cause notice to its logical conclusion by adjudicating upon the said Show-Cause Notice within a reasonable period of time. In view of gross delay on the part of the respondent, the petitioner cannot be made to suffer.”
Hence the Bombay High Court quashed the show cause notices on the ground that there was gross delay on part of the Respondents in not adjudicating the show cause notice and not even informing the petitioner that matter was placed in abeyance which caused serious prejudice to the petitioner.
The Revenue filed Special Leave Petition (SLP)before the Supreme Court. The Coram comprising Justice Krishna Murari and Justice Ahsanuddin Amanullah, after hearing the parties at length, dismissed the SLP holding that there is no good ground to interfere with the judgment of the Bombay High Court.
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