2026-VIL-988-MEG-ST
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SERVICE TAX High Court Cases

Service Tax - Delay in Assessment Proceedings – Violation of Statutory Timelines – Arbitrary Order – Petitioner filed writ petition challenging Order-in-Original dated 12.03.2025 confirming demand for Service Tax and imposing penalties under Finance Act 1994. Show cause notice was issued on 05.10.2016. First personal hearing was granted only on 05.04.2024 after nearly 2704 days. Order was passed on 12.03.2025 after approximately 8.5 years from issuance of show cause notice – Whether impugned order was manifestly arbitrary and time-barred for violation of timelines prescribed under Section 73(4B) of Finance Act 1994 – HELD – Section 73(4B) provides that Central Excise Officer shall determine amount of service tax due within one year from date of notice where it is possible to do so in cases falling under proviso to sub-section 1 or proviso to sub-section 4A. Extended period of limitation under proviso to Section 73(1) has been invoked on grounds of willful suppression attracting Section 73(4B)(b). Authority was duty bound to complete adjudication as expeditiously as possible. Respondents have failed to provide any justifiable cause or reason for the inordinate delay. No representation or request for exemption can indefinitely extend statutory timeline. Section 33A limits adjournments to three during proceedings. Impugned order being passed after undue and unexplained delay of nearly 8.5 years is violative of Section 73(4B)(b) of Finance Act 1994 and is arbitrary and bad in law – The impugned order is set aside and quashed. Writ petition stands allowed
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