Poonam Parasmal Jain vs. Union Of INDIA And Ors Thr Central Govt. Advocates And Ors

Held

The Court held that the show cause notices dated October 20, 2011, and August 6, 2012, were bad in law due to the unexplained and inordinate delay in their adjudication. The Court found the Respondents' explanation regarding the Canon India Private Limited decision unconvincing, noting that it was delivered almost 10 years after the notices were issued and that the Petitioner was not informed of this reason for the delay. The Court observed that no other justification was provided for the delay exceeding 10 years. Following the numerous precedents cited by the Petitioner and relied upon by its Coordinate Benches, the Court concluded that in the absence of any valid justification for the delay, the show cause notices could not be sustained. Consequently, the Court quashed and set aside the impugned show cause notices. The Writ Petition was disposed of accordingly.

Facts

The Petitioner, Poonam Parasmal Jain, challenged two show cause notices dated October 20, 2011, and August 6, 2012, issued by the revenue authorities. The primary ground for challenge was an alleged delay of over 12 years in the adjudication of these notices. The Petitioner relied on numerous High Court judgments to argue that such a delay rendered the notices bad in law. The Respondents, Union of India and others, contended that the delay in adjudication was due to a decision in the case of Canon India Private Limited vs. Commissioner of Customs, delivered in 2021. However, the Court noted that the Petitioner was not informed about the notices being kept pending for this reason, and even the Canon India decision was rendered nearly 10 years after the show cause notices were issued.

Key Issues

1. Whether show cause notices dated October 20, 2011, and August 6, 2012, are bad in law due to a delay of more than 12 years in their adjudication, as per Section 73 of the CGST Act, 2017 (or its predecessor provisions)? Petitioner's Arguments: The Petitioner argued that the inordinate delay of over 12 years in adjudicating the show cause notices made them unsustainable in law. They relied on a long list of precedents, including Coventry Estates Pvt. Ltd. vs. The Joint Commissioner CGST and Central Excise, Bhagwandas S. Tolani vs. B. C. Aggarwal, and Cambata Indus Pvt. Ltd. vs. Additional Dir. of Enforcement, Mumbai, to support the contention that such delays vitiate the proceedings. Respondents' Arguments: The Respondents argued that the delay was attributable to the decision in Canon India Private Limited vs. Commissioner of Customs, delivered in 2021. This decision, they claimed, necessitated keeping the adjudication pending. They did not provide any other justification for the delay.