The Delhi High Court has quashed the show cause notice demanding service tax worth Rs. 6.90 crores citing 9 years delay.
The bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma has observed that there is no reason for the delay caused in concluding the hearing qua the show cause notice dated 21.04.2015 within the stipulated time period, and for issuing the hearing notice after a period of nine years.
The issue raised was whether, in the facts and circumstances of the case, the adjudicating proceedings have become time-barred in terms of Section 73(4B) of the Finance Act, in respect of the impugned show cause notice dated 21.04.2015, since the impugned hearing notice has been issued after a period of nine years.
The petitioner/assessee challenged a Show Cause Notice demanding a total service tax of Rs. 6,90,07,865 (including Education Cess and Secondary & Higher Education Cess) for the period 2012-13 and 2013-14, under proviso to Section 73(1) of the Finance Act, 1994 along with interest and penalties.
The petitioner, refuting the allegations made in the show cause notice, had filed his reply dated 26.05.2015 which was duly received and acknowledged. A notice dated 30.09.2015 was then issued to the petitioner, requiring him to attend the hearing in respect of the impugned show cause notice, on 19.10.2015.
The petitioner had appeared before the Commissioner on 19.10.2015, where the hearing had taken place and the same was concluded on the same day. The copy of the records of personal hearing was also made available to the counsel of the petitioner.
The petitioner however submits that despite the hearing being concluded on 19.10.2015 in respect of the show cause notice, the order was not communicated to the petitioner.
However, after almost nine years from the date of issuance of the show cause notice, the petitioner now received a fresh notice of hearing dated 18.09.2024, intimating him that hearing in respect of the impugned show cause notice has been fixed for 29.09.2024.
The assessee argued that the adjudicating proceedings have become time-barred in terms of Section 73(4B)(a) & (b) of the Finance Act, as the officer concerned is required to determine the amount of service tax within six months or one year from the date of notice as the case maybe, where it is possible to do so.
The department contended that the impugned hearing notice dated 18.09.2024 does not suffer from any infirmity, since the proceedings pertaining to the present case had been kept in abeyance, till the decision of learned CESTAT in Service Tax Appeal, and after the disposal of the appeal, the hearing notice was issued to the petitioner to complete the proceedings.
The court quashed the hearing notice on the grounds of it being time-barred, it is not essential to adjudicate the contentions raised before us regarding the jurisdiction of the officer concerned to issue the said notice.
Case Details
Case Title: Ms L. R. Sharma And Co Versus Union Of India & Ors.
Case No.: W.P.(C) 13689/2024, CM APPL. 57334/2024 (Stay) & CM APPL. 57336/2024
Date: 20.12.2024
Counsel For Petitioner: Akshay Amritanshu
Counsel For Respondent: Shekhar Kumar
