M/S. Sudera Realty Private Limited vs. Union Of INDIA And Ors.

Facts

The petitioner, M/s. Sudera Realty Private Limited, filed a writ petition challenging a show-cause-cum-demand notice dated December 23, 2020, issued under Section 73 of the Finance Act, 1994, read with Section 174 of the CGST Act, 2017. The petitioner had filed a reply to this notice on February 5, 2021, but it remained undisposed of by the Commissioner of CGST and CX, Kolkata South Commissionerate. The writ petition was filed on April 13, 2023, approximately two years and four months after the notice was issued. The Court noted the delay by the petitioner in challenging the notice and the lethargic attitude of the Commissioner in not disposing of the reply.

Held

The Court dismissed the writ petition on the grounds of inordinate delay by the petitioner in approaching the court, observing that the petitioner was attempting to take advantage of the Commissioner's lapse in not disposing of the show-cause-notice. The Court found the petitioner's conduct in waiting for over two years and four months to challenge the notice, after filing a reply, to be unacceptable. However, the dismissal of the writ petition was not to be a bar on the Commissioner to dispose of the pending show-cause-notice in accordance with law. The Commissioner was directed to pass a reasoned and speaking order after giving an opportunity of hearing to the petitioner within four weeks. The Court also directed the Chief Commissioner of CGST to take note of the Commissioner's conduct, hold an enquiry, and fix responsibility for the lapse in concluding the impugned proceeding within the statutory period, to be concluded within eight weeks.

Key Issues

1. Whether the writ petition filed by the petitioner is maintainable given the inordinate delay of approximately two years and four months in challenging the show-cause-cum-demand notice dated December 23, 2020, issued under Section 73 of the Finance Act, 1994, read with Section 174 of the CGST Act, 2017. Petitioner's contention: The petitioner argued that the delay was attributable to the inaction of the Commissioner in not disposing of their reply filed on February 5, 2021, and that they were attempting to take advantage of the revenue's lapse. (Implicitly, the petitioner sought to challenge the notice and its underlying legality). Revenue's contention: The revenue argued that the petitioner's delay in approaching the court was significant and that the petitioner was attempting to benefit from the Commissioner's delay in adjudication.