Strictures against Department – Delay of 22 months in passing order after hearing – No reason for inordinate delay

There was a recovery or demand of Service Tax. A reply to the show cause notice was given by the petitioners on 21/6/2010. On 1/8/2012, a personal hearing was given and concluded on the same date. However, the impugned order was passed after a period of almost 22 months.

The petitioner relied upon a series of circulars issued by the Central Board of Excise and Customs emphasising that the Law laid down by the Hon’ble Supreme Court in Anil Rai vs. State of Bihar, 2009 (233) E.L.T. 13 (S.C.) : 2009 (13) S.T.R. 465 (S.C.) would apply and there should not be any unreasonable delay in passing adjudication order which will be causing difficulties and obstacles in realising Public revenue expeditiously. The Hon’ble Supreme Court has clarified that inordinate, unexplained and negligent delay in pronouncing judgments hampers the exercise of right of appeal. Therefore, the belief, faith and trust of the people in the institution and judiciary is shaken by such delay. This dictum also applies to the quasi judicial adjudication as is contemplated by laws such as Central Excise Act, 1944, Customs Act, 1962 and Finance Act, 1994 as amended from time to time. That is why these circulars were issued.

The court was of the opinion that prima facie there appears to be no explanation for the inordinate delay. The court further observed that even if there is any restructuring and reorganising of the Department of Service Tax and the Commissionerate thereof, there is no reason why such an inordinate delay should occur.

Eventually, all Commissioners must realise that delay in proceedings and passing of orders would be contrary to public interest. They are conferred with powers to determine and adjudicate the demands raised only in a hope that they take steps expeditiously and recover outstanding amount from the defaulters, if any. Hence, sitting on files for months together and sometimes beyond the financial year is, thus, not conducive to the interest of nation’s economy. The trust and faith reposed in them is also then betrayed. If no action is taken against such officers and they are allowed to go scot-free, then, apart from the Revenue getting involved in litigation in higher Courts, Tribunal and others would be encouraged.

Therefore, the Court directed the Chief Commissioner of Service Tax to file a comprehensive affidavit by narrating measures that he proposes to take or has already taken. He shall, then, disclose number of files and matters pending and serially. It should not happen that one who comes to Court, challenges the adverse order only on the ground of delay, the High Court, then, directs that the matter be taken and decided out of turn. The Court observed that the Commissioner has to enlighten us as to how much time would be taken at the end of his Commissionerate to dispose of pending cases.