2025 (3) TMI 335 - HC - Service Tax

Seeking quashing of the amendment made in Clause (105) of Section 65 by the Finance Act 2005 - Whether the SCN and the order in original should be quashed due to delay in adjudication? - HELD THAT - The show cause notice in this case is more than fifteen years old. There was no justification for the Respondents to keep the show cause notice adjudication pending. Despite the dismissal of the stay application the Adjudicating Authority failed to adjudicate the show cause notice and has in fact now gone ahead and passed the order in original after several years. The matter is fully covered by the decisions in VOS Technologies 2024 (12) TMI 624 - DELHI HIGH COURT where the Court observed Ultimately it is incumbent upon the authority to establish that it was genuinely hindered and impeded in resolving the dispute with reasonable speed and dispatch. A statutory authority when faced with such a challenge would be obligated to prove that it was either impracticable to proceed or it was constricted by factors beyond its control which prevented it from moving with reasonable expedition. This principle would apply equally to cases falling either under the Customs Act the 1994 Act or the CGST Act. The impugned show cause notice dated 26th September 2008 and all the subsequent proceedings pursuant to the same including the order in original dated 28th February 2019 shall stand quashed - petition allowed.

Summary

The issues presented and considered in this legal judgment are as follows:1. Whether the amendment made in Clause (105) of Section 65 by the Finance Act, 2005 should be quashed.2. Whether the show cause notice and the order in original dated 28th February, 2019 should be quashed due to delay in adjudication.Issue-Wise Detailed Analysis:1. The Court considered the history of the petition filed by Unising Projects Pvt. Ltd. challenging the amendment made in Clause (105) of Section 65 by the Finance Act, 2005. The Court noted that despite the dismissal of the stay application, the Adjudicating Authority failed to adjudicate the show cause notice, leading to a delay of more than fifteen years.2. The Court referred to the decision in VOS Technologies India Pvt. Ltd. vs. Principal Additional Director General & Anr. and Nanu Ram Goyal vs. Commissioner of CGST and Central Excise, Delhi, which emphasized the need for expeditious conclusion of adjudication proceedings. The Court highlighted that financial liabilities or penal consequences cannot be kept pending for years and decades.3. The Court cited the case of Vijay Enterprises vs. Principal Commissioner of Customs, where it was held that placing a matter on the call book and delaying adjudication for several years is impermissible. The Court emphasized that repeated delays and placing in the call book without adjudication are not valid justifications for prolonged non-adjudication.Significant Holdings:The Court held that there was no stay granted for the adjudicating proceedings, as clarified in previous orders. Following the principles established in previous decisions, the Court quashed the impugned show cause notice dated 26th September, 2008, and all subsequent proceedings, including the order in original dated 28th February, 2019, due to the delay in adjudication.In conclusion, the Court allowed the petition filed by Unising Projects Pvt. Ltd., quashing the impugned show cause notice and subsequent proceedings. The Court also noted that the challenge to the amendment made in Clause (105) of Section 65 of the Finance Act, 2005 was not pressed by the Petitioner, and no other reliefs were sought. The petition was accordingly allowed and disposed of, along with any pending applications.