Order Date – 11 May 2023

Parties: Exide Industries Limited Vs The Deputy Commissioner (CT)

Facts – 

• The Petitioner, Exide Industries Limited, was issued with a show cause notice dated 15.12.2022 citing various grounds for levy of penalty and interest. The petitioner gave details with regard to three of the six queries raised and sought time as regards the remaining three queries.
• However, the respondent proceeded to pass the impugned orders dated 10.02.2023. Being aggrieved the petitioner filed the appeal.

Issue – 

• Whether extension of time in respect of three queries can be allowed to the petitioner?

Order – 

• The Single Bench of Hon’ble High Court observed that from Circular No.12/2022 dated 26.09.2022, it is crystal clear that reasonable opportunity ought to be given to a person to show cause and depending upon the facts of each case, even further extension of time can be granted by the Assessing / Adjudicating Officer. 
• In any event, the decision to refuse or extend time ought to be exercised with sound reasons and not in an arbitrary or capricious manner. The circular dated 26.09.2022 of the respondent also clearly stipulates that the communication granting time or refusal to grant time, shall also be sent to the assessee.
• Hence, it was held that there is a clear violation of the circular of the respondent themselves and it would be just and proper that the petitioner is afforded a fair opportunity to submit its explanation in respect of three pending queries within a reasonable time and thereupon, the respondent may pass fresh orders considering the entire explanation submitted by the petitioner, including the earlier explanations submitted by it.