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The high court was hearing a case in which a company contested a show cause notice issued by the Commissioner of the Central Excise Department, alleging them of non-payment of service tax
A division bench of the Bombay High Court presided over by Justice GS Kulkarni and Justice Jitendra Jain, urged the Ministry of Finance to establish a robust approach for the effective resolution of show cause notices.
“In such view of the matter, we are of the opinion that the Joint Secretary, Ministry of Law and Justice, Aayakar Bhavan, shall forward a copy of our judgment in Coventry Estates Pvt. Ltd. Versus The Joint Commissioner CGST and Central Excise & Anr. (supra), as also this order to the Secretary, Ministry of Finance, so as to appraise him of a legal approach to be adopted by the adjudicating officers, who are vested with such substantial powers of issuing show cause notices and who are dealing with public revenue, so that a robust approach can be adopted in effectively adjudicating the show cause notices, unless such mechanism already exist,” the court said.
The high court was hearing a case in which a company contested a show cause notice issued by the Commissioner of the Central Excise Department, alleging them of non-payment of service tax.
The court also observed that there were instances where show cause notices had been pending for up to ten years.
“We were constrained to make the above observations as we take judicial notice of series of petitions reaching this Court on the ground that the concerned jurisdictional officers exercising such enormous powers not only under the Finance Act, 1994, but also under the other Central Acts, for reasons which are totally ill-conceived and contrary to law, have not adjudicated and/or taken forward the show cause notice for unduly long periods and in some case about 10 years,” the court noted.
The bench remarked that the situation presented a classic example of a lackadaisical approach on the part of the Commissioner of Central Excise for not adjudicating the show cause notice that had been issued 13 years ago, on October 21, 2010.
The bench further emphasized that the Ministry of Finance should address the issue of officers failing to fulfil their duties in a serious manner.
“In our opinion, a serious view in this regard is required to be taken by the Ministry of Finance in regard to the officers who are not diligently discharging such vital duties and who in fact are playing with the public revenue,” the bench noted.
Therefore, the bench quashed the notice and allowed the petition.
Case title: UPL Ltd vs UOI & Ors
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