The main legal point established is that in the absence of a prescribed period of limitation, the authority must exercise its jurisdiction within a reasonable period.

JUDGMENT :

VIBHU BAKHRU, J.

1. The petitioner has filed the present petition, inter alia, praying that the respondents be restrained from pursuing the proceedings or taking any further action in respect of the show cause notice dated 27.02.2009 (hereafter ‘the impugned show cause notice’) issued by respondent no. 1 - Commissioner of CGST & Central Excise, Goods and Service Tax Commissionerate, Delhi. The petitioner also impugns a letter dated 02.08.2022 (hereafter ‘the impugned letter’) calling upon the petitioner for a personal hearing, and prays that the respondents be restrained from proceeding in any manner pursuant to the impugned letter.

2. The petitioner claims that any such proceedings are barred by limitation as the respondents had failed to conclude the proceedings within a reasonable period from the date of issuance of the impugned show cause notice. The respondents claim that the proceedings pursuant to the impugned 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 & Customs (hereafter ‘the CBEC’) from time to time.

3. The question that arises for consideration in the present petition is - whether the respondents can continue the proceedings for adjudication of the impugned show cause notice, after the lapse of almost thirteen years?

Factual Context

4. The petitioner is a partnership firm registered under the Indian Partnership Act, 1932 and engaged in the business of executing civil construction works. The petitioner claims 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 construction of residential flats by the Housing Board Haryana, Gurugram (hereafter ‘the HBH’).

5. On 28.07.2005, the petitioner commenced work in respect of the contracts entered with the HBH for construction of 256 residential flats, in Sector 43, Gurugram, Haryana (hereafter ‘the Project’). The petitioner submits that as on date, the Project stands completed.

6. On 02.07.2008, an investigation was initiated against the petitioner by the Anti-Evasion Branch of respondent no. 1 regarding non-registration of the petitioner with the Service Tax Department and the non-payment of service tax.

7. According to respondent no. 1, the petitioner was liable to pay service tax for rendering taxable services pertaining to ‘Construction of Complex Service’ under Section 65(105)(zzzh) of the Finance Act, 1994 (hereafter ‘the Act’).

8. Respondent no. 1 issued the impugned show cause notice calling upon the petitioner to show cause as to why service tax amounting to Rs. 2,15,58,190/- (Rupees Two Crores Fifteen Lac Fifty-Eight Thousand One Hundred Ninety); Education cess amounting to Rs. 4,31,164/- (Rupees Four Lac Thirty-one Thousand One Hundred Sixty-four); Secondary and Higher Education cess amounting to Rs. 1,01,570/- (Rupees One Lac One Thousand Five Hundred Seventy) and interest and penalties under Sections 76, 77 and 78 of the Act, should not be recovered from the petitioner. It was alleged in the impugned show cause notice that during the period 16.06.2005 to 30.09.2008, the petitioner received a gross amount of Rs. 18,49,75,291/- (Rupees Eighteen Crores Forty-Nine Lac Seventy-Five Thousand Two Hundred Ninety One) for executing the construction works.

9. According to the respondents, the petitioner was not entitled to the benefit of abatement to the extent of 67% of the value of taxable service in terms of the notifications (Notification No. 18/2005-ST dated 07.06.2005 and Notification No. 1/2006-ST dated 01.03.2006), as the petitioner had received free supply of items from the HBH that were not included in the value of services.

10. The petitioner responded to the impugned show cause notice by a letter dated 09.10.2009 disputing the allegations made therein. The petitioner contended that it was not providing the taxable