Superintendent Cannot Adjudicate Cases Involving Extended Limitation: Calcutta High Court

The Calcutta High Court on 2 February held that cases that invoke the extended period of limitation are expressly excluded from the adjudicatory powers of a Superintendent, even if the demand falls within their monetary limit.

Justice Om Narayan Rai, allowed a writ petition filed by the partners of Radiant Security, challenging an order by which the Superintendent, CGST, demanded service tax of Rs. 72,000 along with education cess and secondary and higher secondary cess, and imposed penalties under the Finance Act, 1994.

The demand arose from alleged wilful misstatement and suppression of income in ST-3 returns for the financial years 2014-15 and 2016-17, with the extended period of limitation invoked in the show-cause notice.

The petitioners contended that the order was wholly without jurisdiction, as the Superintendent was not legally competent to adjudicate the case. They relied on Circular No. 1049/37/2016-CX dated 29 September 2016, which bars Superintendents from deciding cases involving taxability, classification, valuation, and extended limitation periods.

The Revenue argued that the petitioners' participation in adjudication proceedings barred them from later challenging the Superintendent's jurisdiction.

Rejecting this, the High Court noted that the Circular “clearly bars Superintendents from adjudicating cases involving taxability, valuation, classification or extended period of limitation, irrespective of the monetary value involved.” The Bench stated:

“The Superintendent would not have any authority to deal with cases related to 'taxability, classification, valuation and extended period of limitation,' even if the same are within the pecuniary limit of Rs. 10,00,000. Such cases, even up to Rs. 10,00,000, must be adjudicated by the Deputy Commissioner/Assistant Commissioner, in addition to cases exceeding Rs. 10 lakhs but not exceeding Rs. 50 lakhs.”

The Bench concluded that since the impugned order was passed based on the extended period of limitation, the Superintendent clearly lacked jurisdiction. It further observed that an inherent lack of jurisdiction goes to the root of the matter and cannot be cured by the taxpayers' participation or acquiescence. It stated:

“Since the adjudicating authority, i.e., the Superintendent, CGST and CX, acted without jurisdiction, no purpose would be served by sending the petitioners to the statutory Appellate Authority.”

Accordingly, the Court set aside the impugned order and disposed of the writ petition without examining the merits of the tax demand.

For Petitioner: Advocates, Jaweid Ahmed Khan, Talha Ahmed Khan, Bhaskar Sengupta

For CGST Authorities: Advocates, Uday Shankar Bhattacharya, Sretapa Sinha

For Union of India: Advocate, Arhat Biswas