No Justification For Not Adjudicating The Notice For More Than 13 Years After Its Issuance: Delhi High Court

The Delhi High Court has held that there is no justification for not adjudicating the notice for more than thirteen years after its issuance.

The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the larger public interest requires that the Revenue Department and its officials adjudicate the show cause notice expeditiously and within a reasonable time.

The petitioner/assessee is a partnership firm engaged in the business of executing civil construction works. The petitioner claimed that it executes contracts for civil works awarded by authorities, institutions, and other entities, including the Central Government and the State Governments. The petitioner was awarded the contract for the construction of residential flats by the Housing Board of Haryana, Gurugram.

The petitioner claimed that the respondents had failed to conclude the proceedings within a reasonable period from the date of issuance of the show cause notice. The respondents claim that the proceedings pursuant to the show cause notice were kept in abeyance as the matter was placed in a call book in terms of the circulars issued by the Central Board of Excise and Customs (CBEC) from time to time.

The issue raised was whether the respondents can continue the proceedings for adjudication of the show cause notice after the lapse of almost thirteen years.

Section 73 of the Act, as in force at the material time, did not stipulate any time period. However, by virtue of the Finance (No. 2) Act, 2014, sub-section (4B) was introduced in Section 73, which stipulated that where it is possible to pass an order, the Central Excise Officer would determine the amount of service tax within a period of one year in respect of cases falling under the proviso to sub-section (1) or the proviso to sub-section (4A), and within a period of six months from the date of notice in cases falling under Section 73(1).

The court noted that the question as to the validity of the "Call Book" procedure is pending consideration before the Supreme Court in a batch of matters.

The court held that the proceedings pursuant to the show cause notice are inordinately delayed and it is now impermissible for the respondents to continue them.

"The respondents are, accordingly, interdicted from taking any action or continuing any proceedings pursuant to the impugned show cause notice," the court said.

Case Title: Nanu Ram Goyal Versus Commissioner Of CGST And Central Excise, Delhi

Citation: 2023 LiveLaw (Del) 332

Date: 18.04.2023

Counsel For Petitioner: Kavita Jha, Shammi Kapoor, Sandeep Gupta, Prachi Jain, Vishal Kumar

Counsel For Respondent: R. Ramachandran

Click Here To Read The Order