M/S Bhupinder Singh And Associates vs. Commissioner Central GST And Anr

Held

The Court allowed the petition and set aside the impugned order dated 15.12.2020. The Court found that the issue was squarely covered in favour of the petitioner by the judgments previously rendered, particularly the decision in M/s GPI Textiles Ltd. vs. Union of India. The Court noted that no interim stay had been granted by the Supreme Court in the appeals filed by the revenue against similar judgments. Therefore, following the established precedent that adjudication orders passed beyond the prescribed or reasonable time limits are liable to be set aside on the grounds of limitation alone, the Court quashed the order. The reasoning was based on the principle that statutory authorities must adhere to time limits for concluding proceedings initiated by show cause notices, and failure to do so, without justification, vitiates the order. The ratio decidendi is that an adjudication order passed after an unreasonable delay, exceeding the statutory or judicially determined time limits, is unsustainable in law.

Facts

The petitioner, M/s Bhupinder Singh and Associates, a works contractor, filed a writ petition challenging an order dated 15.12.2020 passed by the Commissioner of Central GST. The petitioner argued that the order, which confirmed demands for service tax, interest, and penalty, was passed after the expiry of a reasonable period of five years from the date of show cause notices issued on 23.10.2013 and 16.10.2015. The petitioner had undertaken works for government bodies and charitable institutions, which they contended were exempted from service tax. Despite not initially registering, they registered in 2014. Multiple show cause notices were issued between 2013 and 2015, demanding significant amounts of service tax, interest, and penalties. The impugned order was passed after a considerable delay, following a personal hearing notice issued in 2020.

Key Issues

1. Whether the order dated 15.12.2020, confirming demands for service tax, interest, and penalty, is liable to be quashed on the grounds of delay, specifically for being passed after the expiry of five years from the date of the show cause notices dated 23.10.2013 and 16.10.2015, as per Section 73(4B) of the Finance Act, 1994 and relevant High Court judgments? Petitioner's Arguments: The petitioner contended that the adjudication order was passed beyond the prescribed time limit of one year under Section 73(4B) of the Finance Act, 1994, and also beyond the reasonable period of five years as held in various judgments. They relied on the Delhi High Court's decision in Sunder Systems Pvt. Ltd. vs. Union of India, the Gujarat High Court's ruling in Siddhi Vinayak Sintex Pvt. Ltd. vs. Union of India, and this Court's judgments in Bathinda District Cooperative Milk Producers Union Ltd. vs. State of Punjab and M/s GPI Textiles Ltd. vs. Union of India, asserting that delay in passing adjudication orders without proper explanation renders them unlawful and arbitrary. They also noted that the revenue's Special Leave Petition against a similar judgment in M/s Shree Baba Exports was dismissed by the Supreme Court. Respondents' Arguments: The respondents did not record any specific arguments against the petitioner's contention regarding the delay and limitation. They only informed the court that a Special Leave Petition against the judgment in Siddhi Vinayak Sintex Pvt. Ltd. was pending before the Supreme Court.