2016 (9) TMI 900 - HC - Service Tax

Period of limitation - filing an appeal before the Commissioner (appeals) - condonation of delay - 78 days beyond 3 months - appeal could not be filed within prescribed period due to non-receipt of the order in original - Held that - it is true that the outer limit is six months for entertaining of the appeal including condonation of delay. However, in order to find out that the limitation would begin from which date, it was obligatory on the part of the respondent No.2 to verify the record of the acknowledgement received, if any, or any other material for ascertaining the date on which the order was received by the appellant. When the appellant made statement on oath that it received the order only on 11.09.2012 to dislodge or for non-accepting the statement made, there should have been material on record for receipt of the order by the appellant on a particular date. If the material was not there, the second respondent could not proceed on the basis that the order despatched on 16.03.2012 ought to have been received within reasonable time. It is hardly required to be stated that when the statute provides express beginning of the limitation from the date of receipt of the order, unless the receipt is so verified and considered, the limitation cannot be said to have begun. In any case, even if the date of despatch is considered on 16.03.2012 then also within the outer limit of six months, the appeal was already presented on 13.09.2012. It is hardly required to be stated that when the statute provides express beginning of the limitation from the date of receipt of the order, unless the receipt is so veri fied and considered, the limitation cannot be said to have begun. In any case, even if the date of despatch is considered on 16.03.2012 then also within the outer limit of six months, the appeal was already presented on 13.09.2012.Therefore, in the absence of any material considered the date from which the limitation period ought to have been taken, it was a fit case to condone the delay. - Decided in favour of appellant

Summary

Issues:
1. Delay in filing appeal under Section 85 of the Finance Act.
2. Power of appellate authority to condone delay.
3. Verification of receipt date of order for limitation period.
4. Failure to consider relevant provisions of the Finance Act.
5. Setting aside the impugned order and restoring the appeal.

Analysis:
1. The case involved an appeal against an order dismissing a petition due to delay in filing under Section 85 of the Finance Act. The appellant, an assessee proprietary firm in Event Management, received a show cause notice for service tax demand. The delay in filing the appeal was due to the appellant receiving the order late, which was crucial in determining the limitation period for filing the appeal.

2. Section 85 of the Finance Act provides for a three-month limitation period for filing an appeal from the date of receipt of the order. However, the appellate authority has the power to condone the delay for a further period of three months if satisfied with sufficient cause preventing the timely appeal. The outer limit for entertaining the appeal, including condonation of delay, is six months.

3. The appellate authority failed to verify the receipt date of the order to ascertain the starting point of the limitation period. It was crucial to have material on record confirming the date of receipt by the appellant. Without such verification, the limitation period could not be deemed to have begun. The authority should have considered the appellant's statement regarding the late receipt of the order before dismissing the appeal.

4. The judgment highlighted the failure to bring to the attention of the lower courts the proviso to Section 85(3) of the Finance Act, which allows for condonation of delay under sufficient cause. Additionally, the sub-section (2) specifying the beginning of the limitation period from the date of order receipt was not considered by the lower courts. This omission led to the dismissal of the appeal without proper examination of the merits.

5. Consequently, the High Court set aside the impugned orders and directed the condonation of the delay in filing the appeal. The appeal was restored to the file of the second respondent for a thorough examination on its merits after hearing both parties. The court allowed the present appeal based on the circumstances of the case and did not pass any order regarding costs.

In conclusion, the judgment emphasized the importance of verifying the receipt date of the order for determining the limitation period for filing an appeal under the Finance Act. It underscored the authority's power to condone delay under sufficient cause and the necessity to consider all relevant provisions before dismissing an appeal.