Tata Steel LTD Through Its Chief Legal Counsel Indirect Taxes Legal ( I And L) Vikash Mittal vs. Union Of INDIA Through The Commissioner Central GST And Central Excise

Held

The Court held that the adjudication of show cause notices issued between 1994 and 1997, with personal hearing notices issued in 2022, is vitiated by inordinate delay. The Court found that the delay of 27-29 years in adjudicating the matters, particularly in issuing personal hearing notices after such a long lapse, is contrary to the principles of natural justice and leads to unreasonable and arbitrary results. The Court referred to its own decision in W.P.(T) No. 308 of 2023, which quashed a similar show cause notice on the ground of inordinate delay, citing the mandate of Section 11A(11) of the Central Excise Act, 1944. The Court rejected the respondents' contention that the petitioner should have participated in the adjudication, as the delay itself rendered the proceedings unsustainable. The Court also noted that the respondents' claim of approaching the Supreme Court was unsubstantiated by any filed Special Leave Petition. Consequently, the Court quashed the respective show cause notices and the subsequent Order in Original dated February 17, 2023.

Facts

The petitioner, Tata Steel Limited (Growth Shop), challenged show cause notices (SCNs) issued between 1994 and 1997, and subsequent personal hearing notices issued in 2022, after a delay of approximately 27 to 29 years. During the pendency of these writ petitions, the respondent-Department issued a common Order in Original (OIO) dated February 17, 2023, confirming the demands made in the SCNs. The petitioner then amended their petitions to challenge this OIO. The dispute pertains to the classification and duty leviable on Electronic Overhead Cranes (EOCs) manufactured/assembled by the petitioner's Growth Shop. A previous litigation concerning similar issues for an earlier period had reached the Supreme Court.

Key Issues

1. Whether the adjudication of show cause notices issued between 1994 and 1997, with personal hearing notices issued in 2022, is vitiated by inordinate delay and is therefore liable to be quashed, considering the principles of natural justice and the mandate of Section 11A(11) of the Central Excise Act, 1944? Petitioner's arguments: The petitioner contended that the delay of 27-29 years in issuing personal hearing notices and adjudicating the SCNs is inordinate and unjustified. They argued that such a delay violates principles of natural justice and renders the proceedings arbitrary. They relied on the Delhi High Court judgment in Nanu Ram Goyal, emphasizing that gross delay without justified reasons warrants quashing the proceedings. They also pointed out that a similar SCN for the period June 1993 to November 1993 was quashed by this Court in W.P.(T) No. 308 of 2023 on grounds of inordinate delay. Revenue's arguments: The respondents argued that old cases were taken out of the 'call book' for adjudication. They also contended that the petitioner should have participated in the adjudication process as opportunities for hearing were provided, and their failure to respond led to the OIO. They mentioned an intention to approach the Supreme Court against a previous High Court order, but no Special Leave Petition had been filed.