Bombay High Court
Reliance Transport And Travel Pvt. Ltd vs The Union Of India Throuth The Secretary ... on 24 March, 2022
Bench: R. D. Dhanuka, S.M.Modak
KVM
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WPL_6097_OF_2020.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 6097 OF 2020
Reliance Transport and Travel Pvt. Ltd. )
a company incorporated under the )
Companies Act, 1956 and has its registered)
office at 6th Floor, Nagin Mahal, 82, Veer )
Nariman Road, Above Shiv Sagar, )
Churchgate, Mumbai - 400 020 ) ..... Petitioner
VERSUS
1. The Union of India, )
Through the Secretary, Department of )
Revenue, Ministry of Finance, )
Government of India, New Delhi - 110 001)
2. The Principal Commissioner of Central)
Goods and Service Tax, Mumbai, )
South Commissionerate )
(Erstwhile Commissioner of Service Tax-1)
Mumbai), having his office at )
13 Floor, Air India Building, Nariman )
th
Point, Mumbai - 400 021 ) ..... Respondents
Mr.Arvind Datar, Senior Advocate, a/w. Mr.Prakash Shah, Mr.Jas
Sanghavi, i/b. M/s.PDS Legal for the Petitioner.
Mr.Siddharth S.Chandrashekhar for the Respondents.
CORAM: R. D. DHANUKA AND
S.M.MODAK, JJ.
RESERVED ON : 1st MARCH, 2022
PRONOUNCED ON : 24th MARCH, 2022
JUDGMENT:-
Rule. Mr.Siddharth S.Chandrashekhar waives service for the KVM 2/10 WPL_6097_OF_2020.doc respondents. Rule is made returnable forthwith.
2. By this petition filed under Article 226 of the Constitution of India, the petitioner has prayed for a writ of certiorari and quashing and setting aside the impugned (i) Show Cause Notice No. 235/Commr/2011-2012 dated 24th October, 2011 (Exhibit A-1); (ii) Show Cause Notice No. 410/Commr/2012-2013 dated 4th September, 2012 (Exhibit A-2); (iii) Show Cause Notice No. 1010/Commr/2013- 2014 dated 4th November, 2013 (Exhibit A-3); and (iv) Show Cause Notice No. 07/Commr/2014-2015 dated 20th April, 2015 (Exhibit A-4) with consequential reliefs.
3. The petitioner vide letters dated 14th February, 2012, 9th November, 2012, 17th April, 2014, 21st July, 2015 and 14th December, 2016 showed cause to those show cause notices and denied the allegations made in the impugned show cause notices and requested the respondent no.2 to drop the demands in respect of the said show cause notices. On 13th February, 2013, 18th June, 2015 and 19th February, 2016, the respondent no.2 granted personal hearing to the petitioner when the petitioner submitted additional documents and made detailed submissions.
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4. On 18 December, 2013, the petitioner addressed a letter to the th respondent no.2 in respect of first show cause notice and placed on record that the petitioner had not received any order of adjudication in respect of the said show cause notice. The petitioner thereafter never received any further intimation from the respondent no.2 in respect of any of the show cause notices nor received any copy of the order in respect thereof till the date of filing petition.
5. On 9th November, 2020, the petitioner filed this writ petition for various reliefs.
6. Mr.Arvind Datar, learned senior advocate for the petitioner invited our attention to the impugned show cause notices, the reply given by the petitioner to those show cause notices and would submit that though the respondent no.2 had granted personal hearing to the petitioner on 13th February, 2013, 18th June, 2015 and 19th February, 2016, the respondent no.2 did not pass any order on the said show cause notices nor gave any intimation from 2016 onwards which was the last date of hearing nor passed any order till date. It is submitted that the petitioner cannot be made to suffer due to the gross delay on the part of the respondents in not adjudicating upon the show cause notices in last several years.
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7. It is submitted that the petitioner has deposited various amounts to the respondents during the course of investigation under the protest which amounts are liable to be refunded to the petitioner.
8. Learned senior counsel placed reliance on the judgment of this Court in case of Raymond Ltd. vs. Union of India, 2019 (368) E.L.T. 481 (Bom.), Parle International Ltd. vs. Union of India, 2021 (375) E.L.T. 633 (Bom.) and in case of The Bombay Dyeing and Manufacturing Company Limited vs. Deputy Commissioner of CGST & CX, Div-IX, Mumbai Central GST Commissioner delivered on 14th February, 2022 in Writ Petition No. 2874 of 2021.
9. Mr. Chandrashekhar, learned counsel for the respondents on the other hand opposed this petition on the ground that the petitioner was granted personal hearing in respect of first four show cause notices before erstwhile Commissioner, Service Tax, wherein in support of their defence, they relied upon the judgment of Delhi High Court in case of M/s.Intercontinental Consultants & Technocrat P. Ltd. He submits that adjudicating authority have concurred with the proposal for keeping the files in call book in view of the fact that the said judgment of the Delhi High Court was challenged before the Hon'ble KVM 5/10 WPL_6097_OF_2020.doc Supreme Court. After enactment of the Central Goods and Services Tax Act, w.e.f. 1st July, 2017, the files in respect of four show cause notices were received with Mumbai South, CGST & CX Commissionerate, Mumbai. After the decision of the Hon'ble Supreme Court in case of M/s.Intercontinental Consultants & Technocrat P. Ltd. (supra), these files were taken out of call book on 27 th August, 2019. However, due to COVID-19 pandemic, the files could not be processed. The personal hearing was thereafter fixed on 4 th November, 2020 via video conferencing mode. The petitioner however did not attend the said hearing.
10. Mr.Datar, learned senior counsel for the petitioner in rejoinder submits that the petitioner was never informed about the transfer of the show cause notices to the call book at any point of time. He submits that the Supreme Court rejected the Special Leave Petition against the judgment of the Delhi High Court. The reason for transferring the show cause notices to call book was set aside by the Supreme Court.
11. Learned senior counsel placed reliance on section 73(4B) and would submit that the said provision provides for time limit for determining the service tax dues. Section 73(4B) (a) provides for six months and section 73(4B) (b) provides for one year for determining KVM 6/10 WPL_6097_OF_2020.doc the service tax dues. The show cause notices thus ought to have been adjudicated within a period of one year. There is nothing to show that it was not possible to adjudicate the said show cause notices within the time provided in the said provision.
12. It is submitted by the learned senior counsel that if the respondents are allowed to adjudicate upon the proceedings after the gross delay as is demonstrated in this case and if the respondents once call upon the petitioner to pay the substantial amount of duty and penalty with interest for all these years, the petitioner cannot be made to suffer for the payment of interest for the entire period i.e. from the date of show cause notices till the date of passing an order.
13. It is submitted by the learned senior counsel that since the show cause notices were allegedly transferred to call book without any intimation to the petitioner, the respondents cannot be allowed to proceed with the adjudication of those show cause notices and shall be directed to refund the amount paid by the petitioner under protest during the course of investigation.
REASONS AND CONCLUSION :-
14. A perusal of the record indicates that though the respondent no.2 KVM 7/10 WPL_6097_OF_2020.doc had granted a personal hearing to the petitioner on 13 February, 2013, th 18th June, 2015 and 19th February, 2016, no order was passed by the respondent no.2 in those show cause notices. The respondent no.2 never issued any fresh notice for hearing prior to 22nd October, 2020 after 19th February, 2016 nor passed any order on the said show cause notices.
15. The circular relied upon by the respondents for transferring the show cause notices to the call book, clearly indicates that an intimation has to be furnished to the petitioner while transferring the show cause notices to the call book to enable the assessee to challenge the said decision of the respondents. No such intimation was ever given to the petitioner.
16. This Court in case of Parle International Ltd. (supra) after considering the identical facts and after adverting to the judgment in cases of Bhagwandas S. Tolani (supra), Sanghvi Reconditioners Pvt. Ltd. (supra) and Reliance Industries Ltd. (supra) held that that a show-cause notice issued a decade back should not be allowed to be adjudicated upon by the revenue merely because there is no period of limitation prescribed in the statute to complete such proceedings. Larger public interest requires that revenue should adjudicate the show- KVM 8/10 WPL_6097_OF_2020.doc cause notice expeditiously and within a reasonable period. It is held that keeping the show-cause notice in the dormant list or the call book, such a plea cannot be allowed or condoned by the writ court to justify inordinate delay at the hands of the revenue. This Court was accordingly pleased to quash and set aside the show cause notices which were pending quite some time.
17. In case of Sushitex Exports India Ltd. (supra), Division Bench of this Court was pleased to quash and set aside the show cause notices which remained pending for adjudication from 1997. This Court considered the fact that though the petitioner therein was called for hearing in the year 2006, no final order was passed immediately after hearing was granted to the petitioner. It is held that the respondents seem to have slipped into deep slumber thereafter. This Court while quashing and setting aside the show cause notices which were not decided after long delay was pleased to grant consequential relief to the petitioner therein by directing the respondents to return the amounts paid by the petitioner under protest during the course of investigation with interest @ 12% p.a.
18. This Court in case of The Bombay Dyeing and Manufacturing Company Limited Vs. Deputy Commissioner of KVM 9/10 WPL_6097_OF_2020.doc CGST & CX (supra) after adverting to the judgment in cases of Parle International Ltd. Vs. Union of India (supra) and Reliance Industries Ltd. Vs. Union of India (supra) has held that when a show-cause notice is issued to a party, it is expected that the same would be taken to its logical conclusion within a reasonable period so that a finality is reached. If the respondent would have informed the petitioner about the said Show-Cause Notice having been kept in call book when the same were transferred to call book, in the year 2011 itself, the Petitioner would have immediately applied for appropriate reliefs by filing the appropriate proceedings. It is held that it is not expected from the assessee to preserve the evidence/record intact for such a long period to be produced at the time of hearing of the Show- Cause Notice.
19. It is held that the respondent having issued the Show- Cause notice, it is their duty to take the 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. This Court accordingly was pleased to quash and set aside dated 16th September 2005 in that matter. The principles of law laid down by this Court in the above referred judgment would apply to the facts of this case. We are respectfully bound by the principles of law laid down by KVM 10/10 WPL_6097_OF_2020.doc this Court in the said judgment. We do not propose to take a different view in the matter.
20. We, therefore, pass the following order :-
(a) Writ Petition (L) No.6097 of 2020 is allowed in terms of prayer clause (a).
(b) The respondents are directed to refund the amount recovered from the petitioner during the course of the investigation within four weeks from today with interest at the rate of 12% per annum.
(c) Rule is made absolute in the aforesaid terms. No order as to costs.
(d) The parties to act on the authenticated copy of this order.
[S. M. MODAK, J.] [R. D. DHANUKA, J.]
Digitally signed by
VASANT VASANT
ANANDRAO ANANDRAO IDHOL
Date: 2022.03.25
IDHOL 16:05:44 +0530