2018 (3) TMI 1494 - HC - Service Tax

Maintainability of petition - Delay in filing appeal - principles of natural justice - Classification of services - Held that - a discretionary and equitable relief can be granted only when a litigant is diligent and does not exhibit utter callousness or negligence. If the cause shown does not lack bona fides, then, the litigant can seek discretionary relief - This is a clear case where the authorities called upon the petitioner to remain present and repeatedly. They also called upon the petitioner to produce documents and file reply to the show cause notices - none of these authorities acted perversely or in contravention of the principles of natural justice. Their orders, therefore, cannot be interfered in the writ jurisdiction. Petition dismissed.

Summary

Issues:
Challenge to orders-in-original under Article 226 of the Constitution of India regarding service tax classification as "Goods Transport Agency" or "Support Services of Business and Commerce". Delay in filing appeals before Commissioner (Appeals) and Customs, Excise and Service Tax Appellate Tribunal (CESTAT) leading to rejection on grounds of limitation. Petitioner's plea for leniency due to partner's illness and compliance with service tax liability. Respondents' argument of negligence on petitioner's part and lack of reply to show cause notices. Evaluation of compliance with principles of natural justice in adjudication process.

Analysis:
The petitioner, a partnership firm engaged in transportation services, challenged orders-in-original classifying its services under "Support Services of Business and Commerce" instead of "Goods Transport Agency" under the Finance Act, 1994. Show cause notices were issued for service tax recovery, leading to delays in filing appeals before appellate authorities, resulting in rejection on grounds of limitation. The petitioner sought leniency due to a partner's illness and compliance with service tax liability, while the respondents argued negligence on the petitioner's part and lack of reply to show cause notices.

The High Court examined the compliance with principles of natural justice during the adjudication process. Despite ample opportunities provided, the petitioner failed to file replies or attend hearings, leading to the conclusion that the authorities did not act perversely or against natural justice principles. The court emphasized that discretionary relief can only be granted when a litigant is diligent and lacks callousness or negligence. In this case, the enormity of delay and reasons for non-compliance led to the dismissal of the writ petition, as the conduct of the petitioner did not warrant discretionary relief.

The Court highlighted previous instances where delays were condoned by appellate authorities due to genuine reasons, contrasting with the current case where delays could not be condoned under the law. The judgment emphasized the importance of timely compliance and active participation in legal proceedings to seek equitable relief. Ultimately, the Court found that the petitioner's failure to avail opportunities to present submissions or produce documents warranted the dismissal of the writ petition, with no order as to costs.