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 unsustainable due to inordinate delay. The Court found that the delay of approximately 27-29 years in issuing personal hearing notices and adjudicating the SCNs is contrary to the mandate of Section 11A(11) of the Central Excise Act, 1944, and leads to unreasonable and arbitrary results. The Court relied on its previous decision in W.P.(T) No. 308 of 2023, which had quashed a similar show cause notice on the grounds of inordinate delay. The Court reasoned that such a significant delay prejudices the assessee and undermines the fairness of the proceedings. Consequently, the Court quashed the respective show cause notices and the subsequent common Order in Original dated February 17, 2023. The ratio decidendi is that excessive and unjustified delay in adjudication, particularly when it spans decades, violates principles of natural justice and statutory provisions governing time limits for such proceedings, rendering the entire process invalid. The Court allowed all the writ applications.

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 27-29 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 of goods removed by the petitioner's Growth Shop as either 'Crane' or 'Parts of Crane' and the applicable excise duty rates. A prior SCN from 1984 concerning similar issues was litigated up to the Supreme Court, with varying outcomes regarding classification and duty rates.

Key Issues

1. Whether the adjudication of show cause notices issued between 1994 and 1997, with personal hearing notices issued in 2022, is barred by limitation and principles of natural justice due to inordinate delay, contrary to 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. Reliance was placed on the Delhi High Court's decision in *Nanu Ram Goyal* regarding unjustified delay in proceeding with 'Call Book' entries. The petitioner also argued that the respondent's justification for approaching the Supreme Court against a previous High Court order was unsubstantiated, and mere filing of an SLP does not stay a High Court order, citing *Kunhayammed v. State of Kerala*. Revenue/State'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 given, and the petitioner only sought adjournments, leading to the passing of the OIO. The respondents mentioned their intention to approach the Supreme Court against a previous High Court judgment, but no SLP had been filed.