2018 (8) TMI 1290 - HC - Service Tax

Condonation of delay of 5 months and 3 days in filing appeal before the Commissioner (appeals) - non-payment of pre-deposit amount - It is the specific case of the petitioner before the 2nd respondent appellate authority that he is an old aged person, and due to ignorance and unavailability of proper assistance, he could not file the appeal within the period of two months as provided under the provisions of Section 85(3A) of the Finance Act. Held that - It is well settled that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk - In order to do justice between the parties, this Court exercising the powers under Articles 226 and 227 of the Constitution of India, condone the delay in filing the appeal in the interest of justice and taking into consideration the age of the petitioner and accepting the cause shown by the petitioner. Delay condoned - petition allowed - matter is remanded to the 2nd respondent to decide the appeal on merits.

Summary

Issues:
1. Dismissal of appeal on grounds of delay and non-payment of pre-deposit amount.

Analysis:
The petitioner, a Managing Director of a company, received sweat equity shares as part of his salary. The tax authority issued a show cause notice contending the shares were taxable under the Service Tax Act. The petitioner responded, stating he was an employee and not liable for tax. However, the authority levied tax and penalties. The petitioner appealed, but the appeal was dismissed due to delay and non-payment of pre-deposit amount.

The petitioner argued that the dismissal was erroneous, as he had made the pre-deposit before the appellate authority. The petitioner contended that justice should prevail over technicalities. The respondent justified the dismissal based on the delay in filing the appeal and non-payment of the pre-deposit amount within the specified time.

The petitioner, being 76 years old, explained the delay was due to the process of registering online as an assessee, which was unfamiliar to him. He eventually deposited the required amount and filed the appeal. The appellate authority, however, did not consider these reasons and dismissed the appeal based on the delay and non-payment.

The court emphasized the importance of substantial justice over technicalities. It noted that the delay was not deliberate and that the judiciary exists to remove injustice. Considering the petitioner's age and the reasons for the delay, the court exercised its powers under the Constitution to condone the delay and remanded the matter to the appellate authority to decide the appeal on merits without being bound by the limitation period.

In conclusion, the court allowed the writ petition, quashed the impugned order, and directed the appellate authority to decide the appeal on merits, verifying the pre-deposit amount, and passing orders in accordance with the law.