Order Date – 20 April 2023

Parties: Nanu Ram Goyal Vs Commissioner of CGST and Central Excise, Delhi & Ors

Facts – 

• The Petitioner, Nanu Ram Goyal was issued with a show cause notice alleging that the petitioner was liable to pay service tax for rendering taxable services pertaining to ‘Construction of Complex Service’ under Section 65(105)(zzzh) of the Finance Act, 1994 for the period 16.06.2005 to 30.09.2008. The petitioner responded to the impugned show cause notice by a letter dated 09.10.2009 disputing the allegations made therein.
• On 16.06.2010, respondent no.1 issued notice, scheduling a hearing on 30.06.2010 at 13:00 hrs inviting the petitioner to present its submissions. The petitioner did not hear from the respondents thereafter till it received a notice dated 02.08.2022. Respondent no.1 resurrected the proceedings by issuing the impugned letter dated 02.08.2022 scheduling a personal hearing on 10.08.2022.
• Being aggrieved the petitioner filed an appeal

Issue – 

• Whether the respondents can continue the proceedings for adjudication of the impugned show cause notice, after the lapse of almost thirteen years?

Order – 

• The Divisional Bench of Hon’ble High Court observed that it is settled law that where there is no period stipulated for exercising jurisdiction, the same must be done within a reasonable period. Section 73 of the Act, as in force at the material time, did not stipulate any period within which the show cause notice was required to be adjudicated. It merely stipulated the period within which the show cause notice was required to be issued. However, there is no cavil that the authority conferred with the jurisdiction is required to exercise the same within a reasonable period.
• In Sanghvi Reconditioners Pvt. Ltd. v. Union of India through the Secretary, Department of Revenue & Ors. the Court had observed that “the term ‘reasonable time’ is flexible enough and would depend upon the facts and circumstances of each case”. However, there was no justification for not adjudicating the notice for more than fifteen years after its issuance.
• Hence it was held that the proceedings pursuant to the impugned show cause notice are inordinately delayed and it is now impermissible for the respondents to continue the same. The respondents are, accordingly, interdicted from taking any action or continuing any proceedings pursuant to the impugned show cause notice.
• The petition is allowed.