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TMI Blog2023 (8) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... . It can however, be acceptable that a reasonable / plausible delay beyond six months may in a given case be justified depending on the facts and circumstances of the case, for reasons which do not make it possible for the adjudicating officer to conclude the proceedings of the show cause notice. When the legislature uses the words where it is possible to do so in clauses (a) and (b), the legislature is conscious of some free play which is required to be made available to the adjudicating officer. However, such limited relaxation cannot be intended to mean that it would defeat the sanctity and purpose for which the period of six months and one year has been set out to clause (a) and (b) of sub-section (4B) - The word where it is possible to do so thus cannot be read to defeat the timelines of six months and one year as set out in clauses (a) and (b) of sub-section (4B). Also these words cannot be construed to mean that by use of such words a complete freedom is available to the adjudicating officer to adjudicate the show cause notice at his own sweet will, much less, with such inordinate delay as in the present case which is of almost more than 12 years. There are no acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Tax, Mumbai respondent No. 2. It appears from the record that the show cause notice having remained to be adjudicated, has weighed against the interest of the revenue on account of certain irreversible changes, taking place at the noticee s end, inasmuch as on 25 June 2015 IDFC Ltd. stood merged with a new entity, namely, IDFC Bank Ltd., under the orders dated 25 June 2015 passed by the High Court of Judicature at Madras. Subsequent thereto, there was a further significant restructuring of the new company IDFC Bank Ltd., inasmuch as another company known as Capital First Limited, a non-banking finance company, was merged with IDFC Bank Ltd. By virtue of such merger, a new merged entity known as IDFC First Bank Ltd. stood enacted, i.e., the petitioner. This change occurred under the order dated 12 December 2018 passed by the National Company Law Tribunal (NCLT). 5. It is on the above backdrop, the petitioner which was completely unaware about the existence of the impugned show cause notice, received an intimation dated 29 March 2022 from the office of respondent No. 2 calling upon the petitioner for a personal hearing on 19 April 2022 at 2.30 p.m. by video conferencing. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contents of the said letter read thus: To, Dt. 23 June, 2022 Mr. Bipin Narendra Gemani, 101/102, Satyanarayan Bhavan, 7/1, Dr. R. G. Thandani Marg, Worli, Mumbai-400018. Sir, Subject: RTI Application dated 10.06.2021 filed by Shri. Bipin N. Gemani (Received in this office on 15/06/2022)- reg. Please refer to RTI application dated 10.06.2022 (received in this office on 15.06.2022) through Assistant Commissioner (CPIO), CGST CX, Mumbai South vide letter F.No. M. South/RTI/ Bipin N. Gemani/220/2022 dated 20.06.2022. In this regard, it is to inform that as per available record is no such requisite information notices in the jurisdiction of Division VIII, hence, please be treated as NIL report i.r.o. the above mentioned subject. As per Section 19 of RTI Act,2005, if you are not satisfied with the reply given above, you may file an appeal within 30 days from the date of receipt of this reply with the First Appellate Authority, whose particulars are as under:- Shri. Rajiv Garg, Additional Commissioner (First Appellate Authority) CGST C.Ex., Mumbai South Commissionerate 13th Floor, Air Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again the same was refixed on 17 March 2015 which was again adjourned at the request of the noticee to 14 April 2015, and thereafter, on 27 April 2015. Then again the noticee was heard on 21 May 2015. 12. If such are the averments in the reply affidavit, we wonder as to why respondent No. 2 kept on granting requests of IDFC Ltd. for adjournment and did not pass appropriate order and/or final orders on the show cause notice. There is no justification whatsoever or any reason set out for such lapse/inaction of respondent no. 2, which would be acceptable, as set out in the reply affidavit, which can be accepted as a plausible reason preventing the Commissioner from passing appropriate orders for a period of almost five years upto May 2015. We may also note that there is no justification whatsoever for the inaction of the officer from 21 May 2015 to 10 June 2022 when the recent notice came to be issued. 13. The next purported justification, which is of relevance and as canvassed by Mr. Mishra is referring to the contents of paragraph 14 to 16 of the reply affidavit, which is in the nature of legal submissions referring to Section 73(4B) of the Finance Act, 1994. To appreciate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Section 73(4B) which are brought on the Statute book by an amendment made to the Finance Act, 1994 by the Amendment Act No. 2 of 2014, such contention as canvassed by the deponent of the reply affidavit and as canvassed by Mr. Mishra cannot be accepted. It would be appropriate to extract sub-section (4B) of Section 73, which reads thus: Section 73 - Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded (4B) The Central Excise Officer shall determine the amount of service tax due under sub-section (2) (a) within six months from the date of notice where itis possible to do so, in respect of cases falling under sub-section (1); (b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under the proviso to subsection (1) or the proviso to sub-section (4A)]. 15. From a plain reading of the provisions of Section 73(4B) and more particularly, in the context of the legislative intent in introducing sub- section (4B), we cannot accept such contention as urged by the respondent that there is no mandate on the concerned officer of the department to decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f six months and one year as set out in clauses (a) and (b) of sub-section (4B). Also these words cannot be construed to mean that by use of such words a complete freedom is available to the adjudicating officer to adjudicate the show cause notice at his own sweet will, much less, with such inordinate delay as in the present case which is of almost more than 12 years. 18. If the interpretation of the provisions as canvassed on behalf of the revenue is accepted, it would tantamount to defeating the well-settled principles of law that a show cause notice is required to be taken to its logical conclusion within a reasonable period of time and expeditiously, as a show cause notices issued under any fiscal legislation and concerning recovery of revenue would have a very serious concern and bearing on the public revenue. Hence, there cannot be any laxity much less any lethargic approach on behalf of the officers is delaying adjudication of such notices. The legislative provisions which intend to bring about an expeditious and effective adjudication of a show cause notice cannot be defeated by the officers sitting tight on the show cause notice and/or not expeditiously taking them to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it concerns the obligation and repository of the power to be exercised by the concerned officer to recover service tax, in adjudicating any show cause notice, issued against an assessee considering the raison d etre of the provision. It is hence expected that the approach and expectation from the officer adjudicating the show cause notice would be to strictly adhere to the timelines prescribed by provisions of the Act, as there is a definite purpose and intention of the legislature to prescribe such time limits, either under Section 73(4B) of six months and one year respectively or of five years under Section 73(1). 20. We are thus in complete agreement with Mr. Sridharan, learned Counsel for the petitioner, that in the facts of the present case, long lapse of time has caused irreversible changes, for the revenue to adjudicate the show cause notice inasmuch as the original noticee IDFC Ltd. itself has ceased to exist. We are not shown any acceptable reason in facts or in law, which would make it possible for respondent no. 2, in such circumstances, namely, of two statutory events of merger and amalgamation having taken place, to subrogate the petitioner for IDFC Ltd. for ad ..... 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