2014 (8) TMI 482 - HC - Service Tax

Condonation of Delay - Inordinate delay of 541 days - Tribunal declined to condone delay - Held that - Appellants have produced the affidavit of one Shri Parvez Parwala working with altogether another Chartered Accountant i.e. Shri Ingit Modi, Chartered Accountant as well as the affidavit of one Shri Rakesh Thakor who was a clerk working with the aforesaid Shri Parvez Parwala. On considering the further affidavits/affidavits of the aforesaid two persons, it appears that the appellant has come out with altogether a different story of handing over the papers to Shri Rakesh Thakor, a clerk of Shri Parwala of M/s. Ingit Modi, Chartered Accountant. It is required to be noted that as such the aforesaid can be said to be an afterthought and altogether a new story/grounds. Considering the aforesaid facts and circumstances, we are in complete agreement with the view taken by the learned Tribunal that the affidavits filed by the Shri Rakesh Thakor and Shri Parvez Parwala do not inspire any confidence. The learned Tribunal has rightly observed that the respective appellants have failed to make out a sufficient ground to condone the huge delay of 541 days. It appears that the respective appellants were totally negligent. Under the circumstances, the learned Tribunal has rightly refused to condone the huge delay of 541 days in preferring the appeals - Condonation denied.

Issues Involved:
1. Condonation of delay in filing appeals.
2. Eligibility for exemption under the exemption notification dated 01.03.2005.
3. Divisibility of the service of renting immovable property for service tax liability.
4. Liability for nonpayment of service tax and violations of Sections 70, 76, and 77 of the Finance Act, 1994.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The appellants were aggrieved by the Tribunal's refusal to condone a delay of 541 days in filing appeals against the orders of the Commissioner (Appeals). The appellants argued that the delay was due to the negligence of their Chartered Accountant, who failed to file the appeals on time. Affidavits were submitted to explain the delay, but the Tribunal found these affidavits unconvincing and noted a lack of due diligence on the part of the appellants. The High Court upheld the Tribunal's decision, emphasizing that the Tribunal had exercised its discretion judiciously and that the appellants failed to provide a satisfactory explanation for the delay. The court referred to precedents, including the Supreme Court's decisions in *Post Master General v. Living Media India Limited* and *Lanka Venkateswarlu v. State of A.P.*, which stress that discretionary powers to condone delay must be exercised within reasonable bounds and not in cases lacking justification.

2. Eligibility for Exemption Under Exemption Notification Dated 01.03.2005:
The appellants raised the issue of their eligibility for exemption under the notification dated 01.03.2005, which exempts taxable services of aggregate value not exceeding Rs. 8 lakhs in any financial year from service tax. However, the High Court did not delve into the merits of this issue due to the dismissal of the appeal on the ground of delay.

3. Divisibility of the Service of Renting Immovable Property for Service Tax Liability:
The appellants questioned whether the service of renting immovable property is divisible for determining service tax liability among co-owners. This issue was also not addressed on merits by the High Court as the appeal was dismissed due to the delay in filing.

4. Liability for Nonpayment of Service Tax and Violations of Sections 70, 76, and 77 of the Finance Act, 1994:
The appellants contested their liability for nonpayment of service tax and the consequent penalties under Sections 70, 76, and 77 of the Finance Act, 1994. The High Court refrained from examining this issue on merits, given the dismissal of the appeal on procedural grounds.

Conclusion:
The High Court dismissed the tax appeals due to the substantial delay in filing, finding no justifiable reasons to condone the delay. Consequently, it did not address the merits of the other issues raised by the appellants. The court emphasized the importance of adhering to procedural timelines and the necessity of providing convincing explanations for delays to ensure the proper administration of justice.

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