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2023 (4) TMI 873 - HC - Service TaxAdjudication of Show Cause Notice - time limitation - expiry of reasonable period of five years from the date of show cause notices - clause (b) to Section 73 (4B) of the Finance Act - HELD THAT - Issue in the present case is squarely covered in favour of the petitioner, especially the decision rendered in M/S GPI TEXTILES LIMITED VERSUS UNION OF INDIA AND OTHERS 2018 (9) TMI 25 - PUNJAB HARYANA HIGH COURT . Since, no interim stay has been granted by Hon ble the Supreme Court in the appeals, the present petition is allowed. Petition allowed.
Issues involved:
The issues involved in this case include the quashing of an order passed by respondent No. 1 after the expiry of a reasonable period of five years from the date of show cause notices, the liability to pay service tax, interest, and penalties for the period under consideration, and the delay in passing adjudication orders within the prescribed time limits. Quashing of Order: The petitioner, a works contractor under civil contract, sought a writ to quash an order passed after the expiry of five years from the date of show cause notices. The petitioner argued that the order was passed beyond the statutory time limit prescribed by Section 73 (4B) of the Finance Act. The petitioner cited instructions issued by the Central Board of Excise and Customs emphasizing timely adjudication. Legal precedents were referred to, including judgments by the Delhi High Court and the Gujarat High Court, which held that delays in concluding proceedings after a long gap without proper explanation are unlawful and arbitrary. The petitioner also relied on a judgment by the Punjab and Haryana High Court in a similar case to support their argument. The court, considering the absence of an interim stay by the Supreme Court in related appeals, allowed the petition and set aside the impugned order. Liability for Service Tax: The petitioner was issued show cause notices for various periods, demanding payment of service tax, interest, and penalties. The notices alleged contravention of provisions of the Act and Rules, imposing substantial amounts on the petitioner. The petitioner responded to the notices, claiming that the works executed were exempted from service tax. The petitioner highlighted that certain works were purely government works or for non-profitable and charitable societies, exempt from service tax. Details of the works executed during different periods were provided in the replies to the show cause notices. Despite the petitioner's submissions, the Commissioner confirmed the demands in the impugned order dated 15.12.2020. However, the court, considering legal precedents and the absence of an interim stay by the Supreme Court, set aside the order in favor of the petitioner. Delay in Adjudication Orders: The petitioner's counsel argued that the order passed by the Central Excise Officer was beyond the prescribed time limit of one year from the date of notice, as per the Finance Act. Reference was made to instructions issued by the Central Board of Excise and Customs emphasizing timely adjudication. Legal precedents from the Delhi High Court and the Gujarat High Court were cited to support the argument that delays in concluding proceedings after a long gap without proper explanation are unlawful and arbitrary. The petitioner also referred to a judgment by the Punjab and Haryana High Court in a similar case. The court, considering the legal precedents and absence of an interim stay by the Supreme Court in related appeals, set aside the impugned order due to the delay in passing adjudication orders within the prescribed time limits.
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