Excise Act | No Prescription Of Law To Restrict Total Number Of Dates Fixed In An Adjudication Proceeding, To Any Number: Allahabad HC
The Allahabad High Court said that there is no prescription of law to restrict the total number of dates fixed in an adjudication proceeding, to any number.
The Court was dealing with a writ petition challenging the adjudication order of the Assistant Commissioner, Central Goods and Services Tax (CGST) & Central Excise Division by which demand of tax of Rs. 15,64,083/- and equal amount of two penalties (under Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017) and further five penalties of Rs. 10,000/- each and further penalty of Rs. 20,000/- were imposed.
A Division Bench of Justice Saumitra Dayal Singh and Justice Donadi Ramesh observed, “We find ourselves in agreement with the view taken by the Gujarat High Court. Once the legislature contemplates the limits the total adjournments to three dates, it does not contemplate denial of opportunity of hearing. Rather, it seeks to regulate and thereby restrict the number of total adjournments with the apparent intent to allow the adjudication proceedings to conclude in a time bound manner. In the course of adjudication proceedings, number of dates may be fixed. There is no prescription of law to restrict the total number of dates fixed in an adjudication proceeding, to any number. Also, there is no other prescription of time other than the general limitation of five years. Therefore, it is possible that in the course of adjudication proceedings, adjournment may or may not be sought at any particular date fixed. That event would remain case/circumstance specific.”
Advocate Utkarsh Malviya appeared for the petitioner while Advocate Gaurav Mahajan appeared for the respondents.
Factual Background -
According to the petitioner, the adjudication order was served on him in March, 2024. On the other hand, the counsel for the revenue relied on written instructions received by him that indicated that the notice in the adjudication proceedings were dispatched to the petitioner through e-mail as also through speed post at the permanent address that became known to the revenue authorities. In that regard, the petitioner was not registered under the Central Excise Act or the Finance Act, 1994 for the purpose of service tax.
Relying on Section 33A of the Central Excise Act, it was submitted that it never became open to the respondent-authority to fix three successive dates of hearing, by a single notice, that too within a span of seven days, solely with the object of defeating the purpose and intent of Section 33A of the Act. In any case, no order was passed on any of the three dates either granting or refusing adjournment. Without fixing any other date in the proceeding and without issuing any further notice in that regard, the adjudication order was passed and thus, the rules of natural justice were described to have been completely violated.
The High Court in the above regard said, “Fixing three successive dates within a period of one week was not a desirable course to be adopted as it does indicate a pre-conceived notion with the adjudicating authority qua the opportunity of adjournment that may be allowed.”
The Court added that in any case, the adjudicating authority had to pass specific orders to grant adjournment on each date fixed in the proceeding, if such adjournment was sought and it is at that stage that another date may have been fixed.
“Here, it is not the case of the revenue that the assessing authority fixed the three dates either upon adjournment sought or the preceding date or interspaced in time as may have allowed the petitioner a reasonable opportunity to be acquainted with the fact of the adjournment granted on the earlier date. In any case the adjudicating authority did not communicate to the petitioner the order allowing the adjournment sought/deemed to have been sought and allowed on any particular date”, it further noted.
The Court said that no useful purpose may be served in relegating the petitioner to the forum of the alternative remedy as his right of hearing has been seriously impaired.
“What is more glaring is, the adjudicating authority did not pass any order on the third date i.e. 22.02.2023. At the same time, he fixed the proceeding for another date i.e. 23.03.2023. For that date, no notice is shown to have been issued to the petitioner inasmuch as 23.03.2023 would be the fourth date in the adjudication proceedings. The petitioner had a right to be informed of the same”, it also remarked.
The Court noted that in face of original show cause notice having been served on the petitioner and there being no denial as to that, he must be put to terms for the relief being claimed by him.
“Accordingly, subject to the petitioner depositing a sum of Rs. 5,00,000/- within a period of one month from today, the adjudication order dated 23.03.2023 shall stand set aside. Further, the petitioner may treat the adjudication order dated 23.03.2023 to be the part of show cause notice. He may submit his reply thereto within the same time. Subject to such compliance, the adjudicating authority may fix a short date for hearing with fifteen days notice to the petitioner at his address as disclosed in the writ petition and the e-mail at which earlier communications may have been sent”, it concluded.
Accordingly, the High Court disposed of the writ petition.
Cause Title- M/s Avshesh Kumar v. Union of India and 2 Others (Neutral Citation: 2024:AHC:90282-DB)
Appearance:
Petitioner: Advocates Utkarsh Malviya and Niraj Kumar Singh.
Respondents: Advocates Gaurav Mahajan and Gopal Verma.