2015 (6) TMI 472 - HC - Service Tax

Constitutional validity of proviso to Section 85(3) of the Finance Act, 1994 - Condonation of delay - Held that - Petitioner filed an appeal beyond the condonable period of three months, provided by the proviso to Section 85(3) of the Act. The appellate authority, therefore, dismissed the appeal. The right to file an appeal is conferred by a statute and must, therefore, be availed along with all its impediments. Section 85(3) of the Act allows an assessee to file an appeal within 90 days. The proviso to Section 85(3) of the Act empowers the appellate authority to condone delay but not beyond three months. We are unable to discern any legal flaw in the proviso to Section 85(3) of the Act, that would enable us to hold that the proviso impedes the rights of the petitioner to file an appeal or is in any manner in excess of legislature power or should be read down - Decided against assessee.

Summary

Issues:
1. Validity of proviso to Section 85(3) of the Finance Act, 1994.
2. Jurisdiction of appellate authority to condone delay in filing an appeal.
3. Exercise of power under Article 226 of the Constitution to condone delay in filing an appeal.

Analysis:
1. The judgment involved the adjudication of Civil Writ Petitions concerning the proviso to Section 85(3) of the Finance Act, 1994. The petitioner sought a declaration of the proviso as ultra vires or to be read down, along with setting aside penalty orders. The petitioner argued that the proviso imposed an illegal impediment on the right to file an appeal. However, the court found no legal flaw in the proviso, stating that the right to file an appeal is conferred by statute, and the proviso's limitation on condoning delay is within legislative power and must be adhered to. The court rejected the petitioner's contentions regarding the proviso's validity.

2. The court addressed the jurisdiction of the appellate authority to condone delay in filing an appeal. The petitioner had filed an appeal beyond the condonable period of three months as per the proviso to Section 85(3) of the Act. The appellate authority dismissed the appeal due to this delay. The court emphasized that the right to file an appeal must be availed with all its impediments, including the prescribed time limits. It held that the proviso's restriction on condoning delay was valid and did not impede the petitioner's rights. The court upheld the dismissal of the appeal by the appellate authority.

3. The judgment also discussed the petitioner's plea to condone the delay in filing the appeal through the exercise of power under Article 226 of the Constitution. The court referred to a Full Bench judgment in a related case, which held that delay in filing an appeal cannot be condoned using Article 226 powers. Citing this precedent, the court dismissed the writ petitions. The decision was based on the binding nature of the Full Bench opinion, thereby rejecting the petitioner's request to quash the assessment order or condone the delay through constitutional powers.

In conclusion, the High Court upheld the validity of the proviso to Section 85(3) of the Finance Act, 1994, affirmed the jurisdiction of the appellate authority to impose time limits on filing appeals, and rejected the use of Article 226 powers to condone delay in filing appeals based on established legal precedents.