Case Title: Union of India vs Citi Bank NA
The Supreme Court in the present case observed that the authorities are required to initiate proceeding within a reasonable period when no such period has been provided in the Statute.
The Bench observed that the law is already settled on the issue that when the proceedings are required to be initiated within a particular period provided under the Statute, the same are required to be initiated within the said period. However, in cases where no such period has been provided in the Statute, the authorities are required to initiate the said proceeding within a reasonable period. No doubt that what would be a reasonable period would depend upon the facts and circumstances of each case.
The Court also relied upon The State of Gujarat vs. Patil Raghav Natha and others, wherein this Court has held thus:
“11. The question arises whether the Commissioner can revise an order made under Section 65 at any time. It is true that there is no period of limitation prescribed under Section 211, but it seems to us plain that this power must be exercised in reasonable time and the length of the reasonable time must be determined by the facts of the case and the nature of the order which is being revised.”
It also referred the judgement in Government of India v. Citedal Fine Pharmaceuticals, Madras and others, validity of Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956, which did not provide for a period of limitation for initiating proceedings for recovery of escaped duty, was challenged. This Court in the said case observed thus:
“... In the absence of any period of limitation, it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assesee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice of demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case.”