Reliance Transport And Travel ... vs The Union Of India Throuth The ...
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                                                     WPL_6097_OF_2020.doc


      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
          ORDINARY ORIGINAL CIVIL JURISDICTION
             WRIT PETITION (L) NO. 6097 OF 2020
Reliance Transport and Travel Pvt. Ltd. )
a company incorporated under the           )
Companies Act, 1956 and has its registered)
office at 6th Floor, Nagin Mahal, 82, Veer )
Nariman Road, Above Shiv Sagar,            )
Churchgate, Mumbai - 400 020               )   ..... Petitioner

      VERSUS
1. The Union of India,                 )
Through the Secretary, Department of )
Revenue, Ministry of Finance,          )
Government of India, New Delhi - 110 001)

2. The Principal Commissioner of Central)
Goods and Service Tax, Mumbai,          )
South Commissionerate                   )
(Erstwhile Commissioner of Service Tax-1)
Mumbai), having his office at           )
13 Floor, Air India Building, Nariman )
   th

Point, Mumbai - 400 021                 )      ..... Respondents

Mr.Arvind Datar, Senior Advocate, a/w. Mr.Prakash Shah, Mr.Jas
Sanghavi, i/b. M/s.PDS Legal for the Petitioner.
Mr.Siddharth S.Chandrashekhar for the Respondents.
                       CORAM: R. D. DHANUKA AND
                              S.M.MODAK, JJ.

RESERVED ON : 1st MARCH, 2022 PRONOUNCED ON : 24th MARCH, 2022

JUDGMENT:-

Rule. Mr.Siddharth S.Chandrashekhar waives service for the KVM

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respondents. Rule is made returnable forthwith.

2. By this petition filed under Article 226 of the Constitution of

India, the petitioner has prayed for a writ of certiorari and quashing and

setting aside the impugned (i) Show Cause Notice No.

235/Commr/2011-2012 dated 24th October, 2011 (Exhibit A-1); (ii)

Show Cause Notice No. 410/Commr/2012-2013 dated 4th September,

2012 (Exhibit A-2); (iii) Show Cause Notice No. 1010/Commr/2013-

2014 dated 4th November, 2013 (Exhibit A-3); and (iv) Show Cause

Notice No. 07/Commr/2014-2015 dated 20th April, 2015 (Exhibit A-4)

with consequential reliefs.

3. The petitioner vide letters dated 14th February, 2012, 9th

November, 2012, 17th April, 2014, 21st July, 2015 and 14th December,

2016 showed cause to those show cause notices and denied the

allegations made in the impugned show cause notices and requested the

respondent no.2 to drop the demands in respect of the said show cause

notices. On 13th February, 2013, 18th June, 2015 and 19th February,

2016, the respondent no.2 granted personal hearing to the petitioner

when the petitioner submitted additional documents and made detailed

submissions.

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4. On 18 December, 2013, the petitioner addressed a letter to the th

respondent no.2 in respect of first show cause notice and placed on

record that the petitioner had not received any order of adjudication in

respect of the said show cause notice. The petitioner thereafter never

received any further intimation from the respondent no.2 in respect of

any of the show cause notices nor received any copy of the order in

respect thereof till the date of filing petition.

5. On 9th November, 2020, the petitioner filed this writ petition for

various reliefs.

6. Mr.Arvind Datar, learned senior advocate for the petitioner

invited our attention to the impugned show cause notices, the reply

given by the petitioner to those show cause notices and would submit

that though the respondent no.2 had granted personal hearing to the

petitioner on 13th February, 2013, 18th June, 2015 and 19th February,

2016, the respondent no.2 did not pass any order on the said show

cause notices nor gave any intimation from 2016 onwards which was

the last date of hearing nor passed any order till date. It is submitted

that the petitioner cannot be made to suffer due to the gross delay on

the part of the respondents in not adjudicating upon the show cause

notices in last several years.

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7. It is submitted that the petitioner has deposited various amounts

to the respondents during the course of investigation under the protest

which amounts are liable to be refunded to the petitioner.

8. Learned senior counsel placed reliance on the judgment of this

Court in case of Raymond Ltd. vs. Union of India, 2019 (368) E.L.T.

481 (Bom.), Parle International Ltd. vs. Union of India, 2021 (375)

E.L.T. 633 (Bom.) and in case of The Bombay Dyeing and

Manufacturing Company Limited vs. Deputy Commissioner of CGST

& CX, Div-IX, Mumbai Central GST Commissioner delivered on 14th

February, 2022 in Writ Petition No. 2874 of 2021.

9. Mr. Chandrashekhar, learned counsel for the respondents on the

other hand opposed this petition on the ground that the petitioner was

granted personal hearing in respect of first four show cause notices

before erstwhile Commissioner, Service Tax, wherein in support of

their defence, they relied upon the judgment of Delhi High Court in

case of M/s.Intercontinental Consultants & Technocrat P. Ltd. He

submits that adjudicating authority have concurred with the proposal

for keeping the files in call book in view of the fact that the said

judgment of the Delhi High Court was challenged before the Hon'ble KVM

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Supreme Court. After enactment of the Central Goods and Services

Tax Act, w.e.f. 1st July, 2017, the files in respect of four show cause

notices were received with Mumbai South, CGST & CX

Commissionerate, Mumbai. After the decision of the Hon'ble Supreme

Court in case of M/s.Intercontinental Consultants & Technocrat P.

Ltd. (supra), these files were taken out of call book on 27 th August,

2019. However, due to COVID-19 pandemic, the files could not be

processed. The personal hearing was thereafter fixed on 4 th November,

2020 via video conferencing mode. The petitioner however did not

attend the said hearing.

10. Mr.Datar, learned senior counsel for the petitioner in rejoinder

submits that the petitioner was never informed about the transfer of the

show cause notices to the call book at any point of time. He submits

that the Supreme Court rejected the Special Leave Petition against the

judgment of the Delhi High Court. The reason for transferring the

show cause notices to call book was set aside by the Supreme Court.

11. Learned senior counsel placed reliance on section 73(4B) and

would submit that the said provision provides for time limit for

determining the service tax dues. Section 73(4B) (a) provides for six

months and section 73(4B) (b) provides for one year for determining KVM

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the service tax dues. The show cause notices thus ought to have been

adjudicated within a period of one year. There is nothing to show that

it was not possible to adjudicate the said show cause notices within the

time provided in the said provision.

12. It is submitted by the learned senior counsel that if the

respondents are allowed to adjudicate upon the proceedings after the

gross delay as is demonstrated in this case and if the respondents once

call upon the petitioner to pay the substantial amount of duty and

penalty with interest for all these years, the petitioner cannot be made

to suffer for the payment of interest for the entire period i.e. from the

date of show cause notices till the date of passing an order.

13. It is submitted by the learned senior counsel that since the show

cause notices were allegedly transferred to call book without any

intimation to the petitioner, the respondents cannot be allowed to

proceed with the adjudication of those show cause notices and shall be

directed to refund the amount paid by the petitioner under protest

during the course of investigation.

REASONS AND CONCLUSION :-

14. A perusal of the record indicates that though the respondent no.2 KVM

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had granted a personal hearing to the petitioner on 13 February, 2013, th

18th June, 2015 and 19th February, 2016, no order was passed by the

respondent no.2 in those show cause notices. The respondent no.2

never issued any fresh notice for hearing prior to 22nd October, 2020

after 19th February, 2016 nor passed any order on the said show cause

notices.

15. The circular relied upon by the respondents for transferring the

show cause notices to the call book, clearly indicates that an intimation

has to be furnished to the petitioner while transferring the show cause

notices to the call book to enable the assessee to challenge the said

decision of the respondents. No such intimation was ever given to the

petitioner.

16. This Court in case of Parle International Ltd. (supra) after

considering the identical facts and after adverting to the judgment in

cases of Bhagwandas S. Tolani (supra), Sanghvi Reconditioners Pvt.

Ltd. (supra) and Reliance Industries Ltd. (supra) held that that a

show-cause notice issued a decade back should not be allowed to be

adjudicated upon by the revenue merely because there is no period of

limitation prescribed in the statute to complete such proceedings.

Larger public interest requires that revenue should adjudicate the show- KVM

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cause notice expeditiously and within a reasonable period. It is held

that keeping the show-cause notice in the dormant list or the call book,

such a plea cannot be allowed or condoned by the writ court to justify

inordinate delay at the hands of the revenue. This Court was

accordingly pleased to quash and set aside the show cause notices

which were pending quite some time.

17. In case of Sushitex Exports India Ltd. (supra), Division Bench

of this Court was pleased to quash and set aside the show cause notices

which remained pending for adjudication from 1997. This Court

considered the fact that though the petitioner therein was called for

hearing in the year 2006, no final order was passed immediately after

hearing was granted to the petitioner. It is held that the respondents

seem to have slipped into deep slumber thereafter. This Court while

quashing and setting aside the show cause notices which were not

decided after long delay was pleased to grant consequential relief to

the petitioner therein by directing the respondents to return the

amounts paid by the petitioner under protest during the course of

investigation with interest @ 12% p.a.

18. This Court in case of The Bombay Dyeing and

Manufacturing Company Limited Vs. Deputy Commissioner of KVM

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CGST & CX (supra) after adverting to the judgment in cases of Parle

International Ltd. Vs. Union of India (supra) and Reliance

Industries Ltd. Vs. Union of India (supra) has held that when a

show-cause notice is issued to a party, it is expected that the same

would be taken to its logical conclusion within a reasonable period so

that a finality is reached. If the respondent would have informed the

petitioner about the said Show-Cause Notice having been kept in call

book when the same were transferred to call book, in the year 2011

itself, the Petitioner would have immediately applied for appropriate

reliefs by filing the appropriate proceedings. It is held that it is not

expected from the assessee to preserve the evidence/record intact for

such a long period to be produced at the time of hearing of the Show-

Cause Notice.

19. It is held that the respondent having issued the Show-

Cause notice, it is their duty to take the the said Show-Cause notice to

its logical conclusion by adjudicating upon the said Show-Cause

Notice within a reasonable period of time. In view of gross delay on

the part of the respondent, the petitioner cannot be made to suffer. This

Court accordingly was pleased to quash and set aside dated 16th

September 2005 in that matter. The principles of law laid down by this

Court in the above referred judgment would apply to the facts of this

case. We are respectfully bound by the principles of law laid down by KVM

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this Court in the said judgment. We do not propose to take a different

view in the matter.

20. We, therefore, pass the following order :-

(a) Writ Petition (L) No.6097 of 2020 is allowed in

terms of prayer clause (a).

(b) The respondents are directed to refund the amount

recovered from the petitioner during the course of the

investigation within four weeks from today with

interest at the rate of 12% per annum.

(c) Rule is made absolute in the aforesaid terms. No

order as to costs.

(d) The parties to act on the authenticated copy of this

order.

  [S. M. MODAK, J.]                             [R. D. DHANUKA, J.]



                      Digitally signed by
  VASANT              VASANT
  ANANDRAO            ANANDRAO IDHOL
                      Date: 2022.03.25
  IDHOL               16:05:44 +0530