M/S Prakriti Enterprises vs. The Chief Commissioner Of CGST And Central Excise

Held

The Court held that the writ petition was barred by delay and laches. It noted that the cause of action accrued on October 31, 2014, and the writ petition was filed in June 2019, with no reasonable explanation for the approximately five-year delay. The Court emphasized that while there is no fixed limitation period for writ petitions, they must be invoked within a reasonable time. The Court cited Supreme Court judgments, including Tridip Kumar Dingal v. State of W.B. and Tamil Nadu Cements Corporation Limited vs. Micro and Small Enterprises Facilitation Council and Another, to establish that delay and laches are valid grounds for refusing discretionary relief under Article 226. The Court found that the petitioner had not made out a case for interference despite the existence of an alternative remedy, as the delay was significant and unexplained. The pendency of similar matters before the Supreme Court was deemed irrelevant to the petitioner's own inaction. Therefore, the writ petition was dismissed on the preliminary ground of delay and laches.

Facts

The petitioner, M/s Prakriti Enterprises, entered into an agreement with Bihar Shiksha Pariyojna Parishad (BSPP) on June 19, 2007, for providing goods and services related to centrally sponsored schemes. The contract, for a period of three years, was executed and completed between 2007-2008 and 2011-2012. The petitioner failed to register their firm and remit service tax. Consequently, a Demand cum Show Cause Notice was issued on April 23, 2013. The petitioner's reply on March 25, 2014, did not satisfy the department, leading to a final order on October 31, 2014, communicated on November 3, 2014. The petitioner did not file an appeal under Section 86 of the Finance Act, 1994, but instead filed a writ petition on June 19, 2019, seeking to quash the show cause notice and a subsequent notice dated May 10, 2019, issued to the State Bank of India for attaching the petitioner's bank accounts.

Key Issues

1. Whether the writ petition is maintainable on grounds of delay and laches, considering the petitioner filed it approximately five years after the final order was communicated and failed to exhaust the statutory remedy of appeal under Section 86 of the Finance Act, 1994? The petitioner argued that delay and laches would not arise due to alleged violations of Section 73(4-B) of the Act, 1994, and that the Court could ignore delay in light of the facts. They also contended that identical matters concerning Section 73(4-B) were pending before the Supreme Court. The respondents argued that the writ petition was barred by delay and laches, as the cause of action accrued on October 31, 2014, and the petition was filed in June 2019, without exhausting the appellate remedy. They further argued that the petitioner's claim of non-communication of the order was unsubstantiated and that the Supreme Court's pendency would not assist the petitioner due to their own inaction.