L. R. Sharma And Co Vs Union of India & Ors. (Delhi High Court)
Delhi High Court held that inordinate delay of 9 years in prosecuting the case is not justified since the same is much beyond the time limit prescribed under section 73(4B) of the Finance Act, 1994. Accordingly, delay not condoned and hearing notice quashed.
Facts- A Show Cause Notice dated 21.04.2015 demanding a total service tax of ₹6,90,07,865/- for the period 2012-13 and 2013-14, under proviso to Section 73(1) of the Finance Act, 1994 along with interest and penalties was issued to the petitioner. Notably, despite the hearing being concluded on 19.10.2015 in respect of the impugned show cause notice, the order qua the same was not communicated to the petitioner.
However, after almost nine years from the date of issuance of the impugned 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 petitioner is principally aggrieved by the aforesaid action on part of Revenue in reinitiating the adjudication proceedings after a gap of almost nine years.
Conclusion- Held that Section 73(4B) was framed and introduced in the Finance Act to ensure effective administration of taxation. While there cannot be denying that the taxation forms the backbone of a nation’s economy, any inordinate delay by the Revenue itself in prosecuting its own cases cannot be construed in their favour by stretching the period of limitation to nine years especially when the provision requires the proceedings to be concluded within six months / one year.
