Case Law Details
Union of India & Ors. Vs ATA Freight Line (I) Pvt. Ltd. (Supreme Court of India)
Supreme Court of India recently ruled in favor of ATA Freight Line (I) Pvt. Ltd. against the Union of India & Ors., reinforcing the notion that grossly inordinate delay in adjudication of show cause notices is prejudicial and causes unnecessary hardship to the assessee. This ruling was in response to a Special Leave Petition (SLP) filed by the department, challenging an earlier decision by the Bombay High Court.
The department had challenged the order passed by the Hon’ble Bombay High Court, wherein, show cause notices were pending adjudication for a period from ten to seven years and the same were transferred to the call book. No communication was sent by the department regarding the same. The assessee was informed when they sought a closure report from the department. The High Court had, inter alia, held that such gross inordinate delay in adjudication of the show cause notices by the revenue caused prejudice and hardship to the assessee and therefore the show cause notices were quashed. The contention of the department that there has been no deliberate delay in adjudication of the show cause notices issued to the assessee and the show cause notices were kept in the call book in light of similar issues pending before higher forums came to be negated.
The Bombay High Court had quashed the pending show cause notices due to the excessive delay in adjudication, spanning from seven to ten years. This delay was not communicated to the assessee, which they discovered upon seeking a closure report. The department claimed there was no deliberate delay and attributed the holdup to similar issues pending before higher forums. However, this argument was dismissed by the court, emphasizing that this delay was unjustified and detrimental to the assessee.
The Supreme Court’s ruling solidifies the importance of timely adjudication in tax matters. It sends a strong message to the department and other similar bodies about the necessity of prompt actions and communication, particularly in cases of pending show cause notices.
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