2013 (3) TMI 295 - HC - Service Tax

Delay in filling appeal - demand of service tax - Held that - As against the earlier provision enabling filing of an appeal within three months, the said period has now been reduced to two months. Similarly, the provision enabling condonation of delay of three months also has been reduced to one month and Ext.P5 order leaving a service tax was issued by the second respondent on 18.09.2012, which is after the insertion of Section 3A extracted above. Thus this is a case where the petitioner has failed to file the appeal within the time as specified in Section 85 (3A) and if that be so, no fault can be filed with the first respondent in not having accepted the appeal filed beyond the periods specified in the Act. Therefore, it is obvious that the petitioner having lost to the appellate remedy on account of his own latches cannot seek to challenge Ext.P5 in a proceedings under Article 226 of the Constitution of India. See Assistant Commissioner of Central Excise v. Krishna Poduval (2005 (10) TMI 279 - KERALA HIGH COURT) - against assessee.

Summary

Issues:
1. Levy of service tax, interest, and penalty on the petitioner.
2. Filing of writ petition without availing statutory remedy of appeal under Section 85 of the Finance Act, 1995.
3. Interpretation of the amended Section 85(3A) and its impact on the timeline for filing appeals.
4. Failure of the petitioner to file an appeal within the specified timeline.
5. Applicability of the principles laid down in Assistant Commissioner of Central Excise v. Krishna Poduval (2005 (4) KLT 947) to the present case.

Analysis:
1. The petitioner constructed residential quarters for the fourth respondent, which attracted the levy of service tax. Subsequently, service tax, interest, and penalty were imposed on the petitioner through Ext.P5 order issued by the second respondent. The petitioner challenged this levy through a writ petition.

2. The counsel for the petitioner justified the filing of the writ petition without availing the statutory remedy of appeal under Section 85 of the Finance Act, 1995. Section 85 allows for filing an appeal within three months from the date of receipt of the order, with a provision for condoning a further delay of three months. However, the petitioner did not follow this appellate procedure.

3. The Finance Act, 2012 introduced an amendment to Section 85, specifically Section 85(3A), which reduced the timeline for filing appeals to two months from the date of receipt of the decision or order. The amended provision also reduced the period for condonation of delay from three months to one month. This change in the statutory timeline is crucial for understanding the petitioner's failure to file an appeal within the prescribed period.

4. The standing counsel for the respondents argued that the petitioner did not file an appeal within the revised timeline specified in Section 85(3A) after the introduction of the Finance Act, 2012. As a result, the petitioner's failure to adhere to the new timeline barred him from seeking appellate remedy, and consequently, challenging Ext.P5 through a writ petition.

5. The court, relying on the principles established in Assistant Commissioner of Central Excise v. Krishna Poduval (2005 (4) KLT 947), concluded that the petitioner's failure to file an appeal within the revised timeline as per the amended Section 85(3A) precluded him from challenging Ext.P5 through a writ petition under Article 226 of the Constitution of India. Therefore, the court dismissed the writ petition based on the petitioner's non-compliance with the statutory appeal process and the amended timeline for filing appeals.

This detailed analysis highlights the key issues surrounding the levy of service tax, the failure to follow the statutory appeal process, the impact of the amended Section 85(3A) on filing timelines, and the application of legal principles to the petitioner's case.