2023 (6) TMI 630 - HC - Service Tax

Validity of Show Cause Notice (SCN) - Validity challenged after the expiry of 2 years and 4 months - Inordinate delay in adjudicating the SCN - Section 73 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017 - HELD THAT - I am constrained to observe the conduct of the Commissioner of CGST and CX, Kolkata South Commissionerate, for his lethargic attitude in sitting over the reply to the impugned show-cause-notice and not disposing of the same till date for the reasoned best known to him and allowing the impugned proceeding to become time barred for the benefit of the petitioner and to harm the interest of the revenue. Such conduct of the Commissioner concerned is highly deprecable. There is a serious lapses on the part of the petitioner also in challenging the impugned showcause- notice after the expiry of 2 years and 4 months. If according to the petitioner the impugned showcause- notice was without jurisdiction or bad in law it could have challenged the same immediately instead of waiting for so long in approaching this writ court. Considering the conduct of the petitioner in approaching this writ court after an inordinate delay and making attempt to take advantage of lapse of the the Commissioner concerned in not finally adjudicating the impugned show-cause-notice and allowing the petitioner to take advantage of his conduct by allowing the impugned proceedings to become time barred as alleged by the petitioner, this writ petition is dismissed. However, dismissal of this writ petition will not be a bar on the part of the Commissioner concerned to dispose of the pending show-cause-notice in accordance with law and by passing a reasoned and speaking order after giving an opportunity of hearing to the petitioner or its authorised representative within a period of four weeks from the date of communication of this order.

Summary

Issues involved: Challenge to show-cause-cum-demand notice under Section 73 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017 after significant delay.

The High Court of Calcutta heard the case where the petitioner challenged the show-cause-cum-demand notice dated 23rd December, 2020, under Section 73 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017. The petitioner filed the writ petition almost after 2 years and 4 months from the issuance of the notice. The Court observed serious lapses on the part of both the petitioner and the Commissioner of CGST and CX, Kolkata South Commissionerate. The Commissioner's delay in disposing of the reply to the notice was criticized, as it allowed the proceedings to become time-barred to the benefit of the petitioner and to the detriment of revenue. The Court dismissed the writ petition due to the petitioner's delay in approaching the court and attempting to take advantage of the Commissioner's inaction. However, the dismissal did not bar the Commissioner from disposing of the pending notice within four weeks from the date of the order.

The Court highlighted the petitioner's conduct in challenging the notice after an extensive delay and attempting to benefit from the Commissioner's failure to adjudicate the matter promptly. The Court criticized the petitioner for waiting over 2 years and 4 months to approach the court, stating that if the notice was without jurisdiction or unlawful, it should have been challenged immediately. The Court also condemned the Commissioner's lethargic attitude in not disposing of the reply to the notice, allowing the proceedings to become time-barred. The Court termed the conduct of the Commissioner as highly deprecable and emphasized the need for timely and efficient resolution of such matters.

The Court ordered the respondent/CGST Authority to forward a copy of the order to the Chief Commissioner of CGST for necessary action. The Chief Commissioner was directed to hold an inquiry into the Commissioner's conduct and fix responsibility for the delay in concluding the proceedings subsequent to the notice within eight weeks from the date of communication of the order. The Court stressed the importance of adherence to statutory timelines and the need for prompt and fair resolution of legal matters to uphold the interests of both parties involved.