2018 (2) TMI 85 - HC - Service Tax

Whether dismissal of appeal by rejecting the application seeking condonation of delay in filing of appeal in the facts and circumstances of the case and in law could not be countenanced and appeal needs to be restored to the file of the CESTAT for decision afresh affording opportunity of hearing to the appellant to secure the ends of justice? Held that - Taking into account that the appellant is a local authority and the liability which is fastened on the local authority is required to be considered on merits, without entering into merits of the case, remit back in the Tribunal to proceed in the matter on merit after condoning delay in view of the fact that appellant is local authority and face a hazardous procedure and being a service tax at the relevant time was a new subject and every officer was not acquainted with the law in view of special case, we condone the delay on application before Tribunal - appeal disposed off.

Summary

Issues:
Challenge to Tribunal's order on limitation grounds.

Analysis:
The appellant challenged the Tribunal's judgment and order based on limitation grounds. The appeal was admitted on specific substantial questions of law related to the dismissal of the appeal due to delay in filing. The Commissioner's observations highlighted the actions taken regarding the recovery of Service Tax against the appellant. It was noted that multiple opportunities were provided to the appellant for compliance. The appellant, a service provider, was found liable for Service Tax under the Finance Act, 1994. The legal provisions for penalties in case of non-compliance were also discussed, emphasizing the strict liability imposed by the law.

The respondent strongly opposed the appeal, citing instances where the appellant failed to attend personal hearings despite opportunities provided. The respondent's defense reply and records of personal hearings were considered by the CCE(A), demonstrating the appellant's lack of participation in the proceedings. However, considering the appellant's status as a local authority and the complexity of the service tax issue at the relevant time, the High Court decided to remit the matter back to the Tribunal for a fresh consideration on merits after condoning the delay. The High Court emphasized that the appellant's status and the novelty of the service tax issue warranted a second chance for the appellant to present their case before the Tribunal.

In conclusion, the High Court disposed of the appeal with the direction for the Tribunal to hear the matter on merits without expressing any opinion on the case's substance. Both parties were instructed to appear before the Tribunal on a specified date, with no further extensions granted. The decision highlighted the importance of considering the appellant's circumstances and the complexity of the legal issue before proceeding with the case on its merits.