Case Law Details
CMA-CGM Agencies (India) Pvt. Ltd. Vs Union of India (Bombay High Court)
Bombay High Court held that proceedings that are not concluded within a reasonable period cannot be carried forwards after an inordinate delay.
Facts- The petitioner is engaged in the business of providing services under the category of Steamer Agent service, Cargo Handling service, Business Support Service, GTA and Business Auxiliary service and has offices across India for providing the said services.
It is the case of the Petitioner that during the relevant period, various offices of the Petitioner were holding separate service tax registrations with their respective jurisdictional Commissionerate.
Pursuant to an audit conducted for the period 2004-05 to 2007-08, the Delhi office of the Petitioner was issued a Show Cause cum Demand Notice dated 12 October 2009. During pending adjudication, the petitioner obtained centralized service tax registration.
Only after a period of seven years from the date of communication of centralized registration, the petitioner was called for personal hearing in respect of the subject show cause cum demand.
Thereafter, again a notice of hearing in the same matter was issued after around eleven years after the date of the said show cause cum demand notice and failure to adjudicate despite the inordinate delay has rendered the entire proceedings ex-facie invalid, illegal, untenable and unsustainable in law.
Conclusion- This court in the case of Parle International Ltd. vs. Union of India has observed that proceedings should be concluded within a reasonable period and proceedings that are not concluded within a reasonable period, which the Court on the facts of each case has to consider, may not be allowed to proceed further.
In our view, Respondents having delayed the transfer of proceedings from Delhi to Mumbai and not even having bothered to themselves do the same upon the Centralized Registration by the Petitioner on 9 September 2010 and even after the Petitioner informed of the same on 8 May 2013, without any satisfactory explanation for this delay, adjudication of the Show Cause cum Demand Notice No.59 of 2009 dated 12 October 2009, which ought to have been culminated within a reasonable time has not been done and adjudicating the same now after an inordinate and unreasonable lapse of time would be detrimental and cause severe prejudice to the Petitioner.
In the circumstances, we are of the opinion that the impugned show cause cum demand notice dated 12 October 2009 cannot be carried forward after such an inordinate delay.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
The Petitioner, a Company incorporated as APL (India) Pvt. Ltd. under the Companies Act, 2013 which entity vide order dated 15 November 2017 of the National Company Law Tribunal, merged with CMA-CGM Agencies (India) Pvt. Ltd., is engaged inter alia in the business of providing services under the category of Steamer Agent service, Cargo Handling service, Business Support Service, GTA and Business Auxiliary service and has offices across India for providing the said services.
2 It is the case of the Petitioner that during the relevant period, various offices of the Petitioner were holding separate service tax registrations with their respective jurisdictional Commissionerate; accordingly, the Delhi office of the Petitioner was holding Service Tax Registration No.AABCA2731NST002 under the jurisdiction of Range-12, Service Tax Division-II, Service Tax Commissionerate, New Delhi.
3 Pursuant to an audit conducted for the period 2004-05 to 2007-08, the Delhi office of the Petitioner was issued a Show Cause cum Demand Notice No.59 of 2009 dated 12 October 2009 (the “show cause cum demand notice”) by the Commissioner of Service Tax, Delhi, calling upon the Petitioner to show cause as to why :
“(i) Service tax amounting to Rs.5,07,70,296/-; Education Cess and Secondary High Education Cess amounting to Rs.14,02,755/-, as detailed in para 3 of the show cause notice, should not be demanded under Section 66, 67 and 68 of the Act and Rule 6 of the Service Tax Rules, 1994 (hereinafter referred to as the “Rules”) and recovered by invoking extended period of limitation as provided under proviso to subsection (1) of Section 73 of the Act.
(ii) Service tax amounting to Rs. 48,22,124/-; Education Cess and Secondary Higher Education Cess amounting to Rs. 81,580/-, as detailed in para 4 of the show cause notice, should not be demanded under Section 66, 67 and 68 of the Act and Rule 6 of the Rules and recovered by invoking extended period of limitation as provided under proviso to sub-section (1) of Section 73 of the Act.
(iii) Service tax amounting to Rs. 41,83,916/-; Education Cess and Secondary Higher Education Cess amounting to Rs. 54,721/-, as detailed in para 5 of the show cause notice, should not be demanded under Section 66, 67 and 68 of the Act and Rule 6 of the Rules read with Rule 2(1)(d)(iv) of the Rules and recovered from the Petitioner by invoking extended period of limitation as provided under proviso to sub-section (1) of Section 73 of the Act.
(iv) The interest should not be charged and recovered from the Petitioner under Section 75 of the Act.
(v) Penalty in terms of Section 76 of the Act should not be imposed upon the Petitioner for failure to pay Service tax as and when this payment became due.
(vi) Penalty in terms of Section 77(2) of the Act should not be imposed upon the Petitioner for not fling proper return read with Section 70 of the Act; and
(vii) Penalty in terms of Section 78 of the Act should not be imposed upon the Petitioner for suppressing/concealing the value of taxable service with the intent of evading payment of service tax.”
4 Vide letter dated 30 December 2009, the Petitioner fled its reply to the said show cause cum demand notice denying the allegations made therein.
5 Thereafter, pending adjudication of the said show cause cum demand notice, the Petitioner, in respect of its offces across India, obtained Centralized Service Tax Registration No.AABCA2731NST001 under the jurisdiction of the Respondent No.2, Commissioner, CGST and Central Excise, Navi Mumbai, with effect from 9 September 2010.
6 We have heard Mr. Paranjape, learned Counsel for the Petitioner and Mr. Jetly, learned Senior Counsel for the Respondents and with their able assistance we have perused the papers and proceedings in the matter and considered the rival contentions.
7 Mr. Paranjape, learned Counsel for the Petitioner, submits that upon grant of centralized service tax registration, the Divisional Officer was obliged to send intimation to the respective jurisdictional Service Tax office-in-charge of the erstwhile branch to transfer the relevant records to its office for taking further action and to update the records, but despite the same, the files pertaining to the said show cause cum demand notice were not transferred to the Respondent No.2, and instead, the Petitioner was issued personal hearing notice dated 17 April 2013 by the Commissioner, Central Excise, Delhi-III.
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