Quashed¶35

M/S. Savitry Agrawal, Mayurbhanj v. Commissioner (Appeals), Gst, Central Excise and Customs, Bbsr

Orissa HC18 Feb 2025WP(C)/1942/2025

Case brief

AI extract

What is this about?

Finance Act 1994 Section 73(4B)(b) one-year limit for deciding show-cause notice; directory versus mandatory; appellate order quashed for lack of reasons on delay; appeal restored to first appellate authority; no merits observation, Tribunal remedy left open; show-cause notice barred by delay contention; reasoned order requirement; Orissa High Court; W.P.(C) 1942 of 2025; order in appeal dated 6th December, 2024; Commissioner(Appeals) GST Central Excise and Customs BBSR.

What did the court decide?

Impugned appellate order set aside and quashed; appeal restored to the first appellate authority for providing reason(s) on section 73(4B)(b); no observation on merits, petitioner to avail statutory remedy of appeal before the Tribunal if ventilating merits; writ petition disposed of. ¶35

M/S. Savitry Agrawal, Mayurbhanj Vs Commissioner (Appeals), Gst, Central Excise and Customs, Bbsr — Orissa HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the impugned appellate order, being silent on why the decision could not be made within one year under section 73(4B)(b) of the Finance Act, 1994, is bereft of reasons regarding the delay bar, sufficient to cause interference. +1 more

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Court's answer

The appellate authority correctly appreciated the scope of section 73(4B)(b), Finance Act, 1994, i.e., that there must be a decision within one year as far as possible.

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Ratio / Principle

Since the impugned order is silent on why the decision could not be made within one year as was not possible, the contention that section 73(4B)(b) is directory is without basis.

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Key takeaways

The second reason in paragraph 5.9 — that the case was pending for long and caused no prejudice to the petitioner — is a clear admission of long delay, and both reasons cannot be accepted for adjudicating on what was possible in the period of one year.ratio¶33
The impugned order turns out to be bereft of reasons regarding delay, which is sufficient to cause interference.ratio¶33
No observation or comment is made on the merits of the impugned order; in event the petitioner is required to ventilate on merits, she must avail the statutory remedy of appeal before the Tribunal.

Detailed headnote1 paragraphs

W.P.(C) No.1942 of 2025 (High Court of Orissa at Cuttack; Arindam Sinha, Acting Chief Justice and M.S. Sahoo, J.; decided 18.02.2025): Petitioner challenged the order in appeal dated 6th December, 2024 of the first appellate authority, contending that initiation of proceedings by show-cause notice was barred by delay. The impugned order's paragraph 5.9 reasoned that the one-year decision timeline in Section 73(4B)(b) of the Finance Act, 1994 is "directory and not mandatory", and that long pendency caused no prejudice. The Court held that the appellate authority correctly appreciated the scope of the provision (decision within one year "as far as possible"), but since the impugned order was silent on why the decision could not be made within one year, the "directory" contention was without basis; the second reason amounted to an admission of long delay and could not be accepted. The impugned order was thus bereft of reasons regarding delay, sufficient to cause interference. The impugned appellate order was set aside and quashed and the appeal restored to the first appellate authority to provide reason(s) on section 73(4B)(b). The Court made no observation on merits, leaving the petitioner to avail the statutory remedy of appeal before the Tribunal. Writ petition disposed of.

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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W.P.(C) No.1942 of 2025

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M/s. Savitry Agrawal, Mayurbhanj

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…. Petitioner

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Represented By Adv. – Mr. C.R. Das, Advocate

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-versus-

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…. Commissioner(Appeals), GST, Opposite Parties Central Excise and Customs, BBSR and others

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Represented By Adv. – Mr. C.S. Mishra, Advocate (Senior Standing Counsel)

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CORAM:

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THE HON'BLE MR. JUSTICE ARINDAM SINHA,

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THE ACTING CHIEF JUSTICE

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AND

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THE HON'BLE MR. JUSTICE M.S. SAHOO

ORDER

18.02.2025

Order No.

01.

1. Mr. Das, learned advocate appears on behalf of

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petitioner and submits, impugned is, inter alia, order in appeal

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dated 6^th December, 2024. The action of initiating proceeding

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by issuance of show-cause notice was barred by delay. He

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draws attention to paragraph 5.9. It is reproduced below.

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“5.9 In this regard I find that as per Section 73(4B)(b) of the Finance Act’1994, Show Cause

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Page 1 of 4

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notice should have been decided within time limit prescribed and preferably within one year. The Section 73(4B)(b) of the Finance Act, 1994 merely states that the cases where suppression etc. are invoked under Section 73(1) of the Finance Act’1994 may be decided within one year as far as possible. Thus the said section does not make it mandatory to decide the cases within one year. Further, although the case was pending decision for long, it did not cause any prejudice to the Appellant as the case is decided based on records and law during the relevant time.”

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He submits, aforesaid is no reason for consideration. In the circumstances, impugned order suffers from lack of reason regarding it being barred by delay. His client also has contentions on merit. It be set aside without proceeding to see purported adjudication on merits.

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2. Mr. Mishra, learned advocate, Senior Standing Counsel

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appears on behalf of revenue and submits, there was adjudication duly made. Petitioner unsuccessfully preferred appeal. Good reasons have been given, both on delay as well as more importantly, on merits. Petitioner has no defence to the demand. Without prejudice, petitioner having had availed

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Page 2 of 4

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of the statutory relief mechanism, must, if aggrieved, prefer appeal to the Tribunal. The writ petition be dismissed.

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3. In above reproduced paragraph-5.9 from impugned appellate order we see that the appellate authority correctly appreciated scope of the provision to be that there must be decision within one year as far as possible, required by section 73(4B)(b) in Finance Act, 1994. The paragraph carries two reasons given. First, regarding decision within one year as far as possible, it is according to the authority, directory and not mandatory. Secondly, the case was pending for long and it did not cause prejudice to petitioner.

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4. Impugned order being silent on why the decision could

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not be made within one year as was not possible, the contention of the provision being directory is without basis. Second reason is clear admission of long delay as did not cause prejudice to petitioner. These we cannot accept as reasons for adjudicating on what was possible in the period of one year. As such, impugned order turns out to be bereft of reasons regarding delay. It is sufficient to cause interference.

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Page 3 of 4

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5. Impugned appellate order is set aside and quashed. The appeal is restored to the first appellate authority for providing reason(s) on section 73(4B)(b). We make no observation or comment regarding merits of impugned order because in event petitioner is required to ventilate on merits, she must avail statutory remedy of appeal before the Tribunal.

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6. The writ petition is disposed of.

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(Arindam Sinha) Acting Chief Justice

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(M.S. Sahoo) Judge

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Prasant

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Signature Not Verified

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Digitally Signed Signed by: PRASANT KUMAR SAHOO Designation: PERSONAL ASSISTANT Reason: Authentication Location: Orissa High Court Date: 18-Feb-2025 18:43:40

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Page 4 of 4

M/S. Savitry Agrawal, Mayurbhanj v. Commissioner (Appeals), Gst, Central Excise and Customs, Bbsr

Case brief

What is this about?

What did the court decide?

M/S. Savitry Agrawal, Mayurbhanj v. Commissioner (Appeals), Gst, Central Excise and Customs, Bbsr

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

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