Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Bom) 935

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G. S. KULKARNI, AARTI SATHE, JJ.
Hindustan Petroleum Corporation Ltd. - Petitioner
Vs.
The State of Maharashtra & Ors. - Respondent
Writ Petition No. 637, 638, 639 of 2024
Decided On : 22-04-2026
Advocate Appeared :
For the Petitioner : Ms. Padmavati Patil with Mr. Kiran Chavan i/b. Cenex Legal LLP
For the Respondent : Ms. Shruti Vyas, Addl. G. P. with Mr. Aditya Deolekar, AGP, Mr. Sandeep Ghaterao

Advocates:
For the Appellants/Petitioners: Ms. Padmavati Patil with Mr. Kiran Chavan i/b. Cenex Legal LLP
For the Respondents:Ms. Shruti Vyas, Addl. G. P. with Mr. Aditya Deolekar, AGP for the State, Mr. Sandeep Ghaterao for Respondent/NMMC

Assessment orders quashed as barred by 3-year limitation under Cess Rules and unreasonable due to over 10-year delay from show cause notice, causing prejudice; proceedings must complete within reasonable time.

Headnote:(A) Cess Rules, 1996 - Rule 25(3), (4), (5), (7) - Show cause notice in Form-H issued; assessment order passed after over 10 years delay without justifiable reason is unreasonable and liable to be quashed - Proceedings must be completed within reasonable time, even absent specific outer limit - Sub-rule (5) bars assessment after 3 years from end of relevant year - Failure to consider monthly returns, annual statements evidencing exports outside municipal area (90% cess exempt) renders order erroneous. (Paras 3,8,9,12)

(B) Principles of natural justice and reasonableness - Inordinate delay in adjudication prejudices assessee, defeats rights, abridges appeal remedies - Law abhors delay (lex dilationes abhorret); administrative inaction arbitrary, violates Article 14 - Prompt adjudication expected to avoid irreversible changes frustrating process. (Paras 10,11)

Facts of the case:
Petitioner cleared petroleum products via pipeline to terminal within municipal limits for period April 2010 to March 2011; filed monthly returns and annual statement detailing quantity/value exported outside area (90% cess not payable). Show cause notice (Form-H) issued 24 August 2011; response with details submitted 09 September 2011. No action for ~9 years; reminder July 2023; assessment order (Form-I) 21 August 2023 ignoring exports, followed by demand notice. Similar facts in connected petitions (notices June 2012, June 2013; orders August 2023).

Findings of Court:
Impugned assessment orders quashed as barred by limitation under Rule 25(5) and unreasonable due to >10 years delay from Form-H notices; binding on respondent per coordinate bench decision (review dismissed).

Issues: Whether assessment orders barred by 3-year limitation from end of relevant year under Rule 25(5); whether delayed >10 years from Form-H issuance violates reasonableness; whether orders erroneous for ignoring export evidence.

Ratio Decidendi: Assessment under Rule 25 must conclude reasonably post-Form-H, not pend indefinitely; 10-year delay without justification unreasonable, especially post-documents submission; coordinate bench precedent holds such delay quashes proceedings; non-consideration of filed returns/statements erroneous.

Result: Writ petitions allowed in terms of prayers (a) and (b); assessment orders quashed.

Table of Content
1. binding siemens precedent applies despite review dismissal. (Para 1 , 2 , 3 , 4)
2. facts show 10-year delay after form-h notice. (Para 5 , 6 , 7)
3. rule 25 mandates reasonable time for assessment completion. (Para 8 , 9)
4. inordinate delay prejudices assessee, violates natural justice. (Para 10 , 11)
5. delayed assessments quashed as unreasonably belated. (Para 12 , 13 , 14)

Judgment :

(Per G. S. Kulkarni, J.)

Writ Petition No. 637 of 2024

1. Rule returnable forthwith. Respondents waive service. By consent of the parties, heard finally.

2. This petition under Article 226 of the Constitution of India is filed praying for the following substantive reliefs:-

“(a) that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to hold that the Assessment Order dated 21.08.2023 passed by the Cess Officer (Respondent No.3) after a lapse of three years from the end of the year, i.e. on or before 31.03.2014, is barred by limitation as per Rule 25(5) of the Cess Rules;

(b) that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to hold that the Assessment Order dated 21.08.2023 passed by the Cess Officer (Respondent No.3) after a lapse of ten years from the date of issue of notice in Form-H is barred by limitation as has been held by this Hon'ble Court in the case Siemens Limited;

(c) that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to hold that the Cess liability was assessed erroneously, without considering and appreciating various evidences like monthly Returns, annual statement, etc. and be pleased to quash and set aside the impugned Assessment Order dated 21.08.2023 passed by the Cess Officer (Respondent No.3);

d) that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to direct the Cess Officer (Respondent No.3) to reassess the Cess dues, if any, after considering and adjusting the Cess liability on the quantum of petroleum products exported out of NMMC area;

(e) that, as an alternative, this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to permit the Petitioner to file an appeal under Section 406 of MMC Act, within a reasonable time, and direct the Appellate Authority to hear and decide such appeal without insistence for deposit of any tax confirmed, under Section 406(8) of MMC Act;

(f) that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction under Article 226 of Constitution of India, calling for the records of the case and after going into the question of legality and propriety thereof, be pleased to direct the Cess Officer (Respondent No.3) not to take any recovery proceedings till final disposal of this Petition by this Hon'ble Court.”

3. The primary contention of the petitioner is on the

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