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IN THE HIGH COURT OF JHARKHAND AT RANCHI
RONGON MUKHOPADHYAY, DEEPAK ROSHAN, JJ.
M/s Kamaladitya Construction (P) Ltd. - Petitioner
Versus
The Principal Commissioner of Central Goods and Service Tax, Ranchi - Respondent
W.P. (T) No. 2890 of 2022
Decided On : 09-10-2023
DELAYED ADJUDICATION - FINANCE ACT, 1994 - SECTION 73(4B), ARTICLE 14 - [DELAYED ADJUDICATION] - [The judgment discusses the delayed adjudication of a show cause notice issued under Section 73(1) of the Finance Act, 1994, and the violation of Article 14 of the Constitution of India due to the delay. The court refers to various judgments to support the contention that delay in adjudication causes prejudice to parties and is contrary to Article 14. It interprets the provision of Section 73(4B) and emphasizes that the time limit must be adhered to unless there are reasonable grounds beyond the control of the adjudicating authority. The court also highlights the principle that the legislature does not waste words and that the provisions of a fiscal statute, including the period of limitation, must receive strict construction to provide certainty and finality to legal proceedings.]
Fact of the Case:
The petitioner challenges the delayed adjudication of a show cause notice issued under Section 73(1) of the Finance Act, 1994, citing violation of Article 14 of the Constitution of India due to the delay. The petitioner contends that the delay in adjudication has caused prejudice and detriment, and the impugned show cause notice should be quashed and set aside.
Finding of the Court:
The court finds that the delayed adjudication of the show cause notice, pending for more than 7 years, is unreasonable, arbitrary, and violates Article 14 of the Constitution. It emphasizes that the provisions of Section 73(4B) must be read reasonably, and the time limit for adjudication should be strictly adhered to unless there are reasonable grounds beyond the control of the adjudicating authority. The court also holds that the delay in adjudication without reasonable grounds is contrary to the principles of natural justice.
Issues: The issues revolve around the delayed adjudication of the show cause notice, the interpretation of Section 73(4B) of the Finance Act, 1994, and the violation of Article 14 of the Constitution of India due to the delay. The court also addresses the applicability of alternative remedies and the judgments cited by the Revenue.
Ratio Decidendi: The court's decision is based on the interpretation of Section 73(4B) of the Finance Act, 1994, and the principles of natural justice. It emphasizes that the time limit for adjudication must be adhered to unless there are reasonable grounds beyond the control of the adjudicating authority. The court also highlights the principle that the legislature does not waste words and that the provisions of a fiscal statute, including the period of limitation, must receive strict construction to provide certainty and finality to legal proceedings.
Final Decision: The court quashes and sets aside the impugned show cause notice dated 24.12.2014 and the notice dated 06.06.2022, allowing the instant application and closing any pending interim applications.
JUDGMENT :
DEEPAK ROSHAN, J.
1. The instant application has been preferred for the following reliefs:
(ii) For issuance of writs, orders and/or directions, for quashing and setting aside the impugned Notice dated 06.06.2022 bearing No. C. No. V (65) 03/Adjn./KCPL/Bok (RanII)/2014/3167 (Annexure-2) issued by the Superintendent (Adjudication) O/o Principal Commissioner of Central Goods and Services Tax and Central Excise, Central Revenue Building, 5-A, Mahatma Gandhi Road (Main Road), Ranchi-834001, the Respondent No. 3.
(iii) Pending final hearing of this Petition, the Respondents, their servants, agents and subordinates be restrained from giving any effect and/or further effects to and/or acting on the basis of Petitioner in the present writ Petition under Article 226/Article 227 of the Constitution of India is challenging the legality and validity of impugned Show Cause Notice dated 24.12.2014 (Annexure-1) and impugned notice dated 06.06.2022 (Annexure-2) pending the disposal of this application.
2. The petitioner in the present writ application is challenging the legality and validity of the impugned show cause notice dated 24.12.2014 (Annexure-1), issued by the Respondent No. 2 in purported exercise of powers under proviso to Section 73(1) of the erstwhile Chapter V of the Finance Act, 1994. The petitioner has further challenged the legality and validity of notice of personal hearing dated 06.06.2022 (Annexure-2) issued by the Respondent No. 3 fixing personal hearing on 21.06.2022.
3. The petitioner has challenged the legality and validity of the impugned Show Cause Notice date 24.12.2014, mainly on grounds of delayed adjudication after lapse of more than 7 years which is contrary to provisions of Sub-section (4B) of Section 73 of erstwhile Chapter V of the Finance Act, 1994 and also beyond the reasonable period of limitation and which offends Article 14 of the Constitution of India being arbitrary and unreasonable.
4. Petitioner had filed reply to the impugned Show Cause Notice vide their letter dated 04.10.2016. The respondent No. 2 fixed the matter for personal hearing on dated 5.10.2016 on which date the Petitioner appeared before the Respondent No. 2 and made submissions. Thereupon, the adjudication of the impugned Show Cause Notice was kept in suspended animation sine die for more than seven years.
The petitioner now received impugned notice dated 06.06.2022 issued by the Respondent No. 3 intimating fixation of personal hearing on 21.06.2022 in the office of the Respondent No. 1 for adjudication of the impugned Show Cause Notice dated 24.12.2014.
5. Mr. Kartik Kurmy, learned counsel for the petitioner submits that Show-cause notice dated 24.12.2014 (Annexure-1) issued under Section 73 under Chapter-V of the Finance Act, 1994 has not yet been adjudicated upon. Learned counsel further placed relevant provision, in particular Section 73(4B) (a) (b) of the Finance Act, 1994, as per which a limit of six months and one year is provided for completing adjudication proceedings under sub-section (1) thereof or its proviso with a rider “where it is possible to do so.”
Learned counsel for the petitioner submits that personal hearing was held on 05.10.2016 and thereafter, it appeared that the entire proceeding was kept under suspended animation till a fresh date for personal hearing has been fixed on 06.06.2022. Learned counsel contended that the same issue has been under consideration as respects the Central Excise Act, 1944 and Customs Act, 1962 before different jurisdictional High Courts and it has been held that the time limit has to be strictly adhered to if the Revenue does not have explanation for the delay in completing adjudica
Delayed adjudication attributable to the revenue violates procedural fairness and the principles of natural justice.
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.
The court held that a service tax demand order issued after the statutory time limit is invalid, emphasizing the necessity for timely adjudication in tax matters.
Proceedings under section 11A of Act are adjudicatory proceedings and authority which decides same is a quasi-judicial authority. Such proceedings are strictly governed by statutory provisions. Secti....
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