The Delhi High Court has held that the Goods and Service Tax (GST) department cannot delay adjudication indefinitely and it is their legal obligation to expedite proceedings.
The bench of Justice Harish Vaidyanathan Shankar has relied on the decision in the case of Vos Technologies India (P) Ltd. v. Director General in which it was held that matters having financial liabilities or penal consequences cannot be kept unresolved for years; and the phrase “where it is possible to do so” cannot be a license to keep matters pending for years. Theflexibility provided by the legislation is not meant to be overused or construed as sanctioning indolence. The statutory leverage cannot be brought into play routinely and in an unfettered manner for years, without any due justification or explanation.
The Anti- Evasion Wing of the Central Excise, Delhi-1, conducted searches and effected seizures under the Central Excise Act, 1944 from the premises of the Petitioner firms and that of Mr. Parmod Kumar Jain. A panchnama of the seized goods was duly drawn. Mr. Parmod Kumar Jain was the proprietor of M/s Paras Products and M/s Sai Enterprises, and his son, Mr. Ankit Jain, was the proprietor of M/s Jaina Polymers. During the search, the materials were seized at the premises.
The clearance of footwear and soles falling under Chapter headings 6402 and 6406 of the Central Excise Tariff Act, 1985.
A common Show Cause Notice dated 25.10.2011 came to be issued and on the passage of the Central Goods and Services Tax Act, 2017, the jurisdiction of the Respondent authorities altered and two orders came to be issued.
Two SCNs dated 25.10.2011 and 30.12.2014 came to be issued to the Petitioners. One in respect of the seized goods and the other for the offended goods (past clearances).
The second SCN was issued to the petitioner firms, proposing to demand duty in respect of offended goods cleared in the past. The said SCN was adjudicated vide Order-in-Original dated 28.08.2015 by Additional Commissioner, Central Excise, Delhi- 1.
In terms of the Order-in-Original, the duty demanded and interest and penalties imposed were paid, and in so far as the SCN dated 30.12.2014 is concerned, the same need not engage our attention.
It is the first SCN dated 25.10.2011 that will require our attention. This came to be adjudicated only on 30.12.2022 and 02.03.2023 vide two separate OsIO.
The OIO dated 30.12.2022 was in relation to the Petitioner in W.P.(C) 6235/2023, whereas, the impugned OIO dated 02.03.2023 was in relation to the Petitioners in W.P.(C) 6376/2023 & W.P.(C) 6648/2023.
The principal ground to assail the Impugned OsIO is the inordinate delay in the finalization of the adjudication proceedings, which is more than 11 years in both cases.
The court quashed the OsIO dated 30.12.2022 [in W.P.(C) 6235/2023] and 02.03.2023 [in W.P.(C) 6376/2023 & W.P.(C) 6648/2023] passed by the department. Consequently, the Respondent authorities are directed to release the Bank Guarantee furnished by the Petitioner at the time of release of the seized goods, within a period of 6 weeks.
Case Details
Case Title: Paras Products Versus Commissioner Central GST
Case No.: W.P.(C) 6235/2023
Date: 20.03.2025
Counsel For Petitioner: D. S. Nagi
Counsel For Respondent: Ramachandran
