2021 (12) TMI 620 - AT - Service Tax

Condonation of delay in filing appeal - appeal has been rejected as being filed beyond the stipulated period without any genuine reason - Section 123 of the Finance ( No.2) Act, 2019 - HELD THAT - It is observed that the appeal has not been filed within a period of 2 months /60 days as has been stipulated statutorily in terms of section 85 (3)A of the Finance Act. Apparently and admittedly, it has been filed within a period of 90 days i.e. within the permissible time limit in terms of proviso to the provisions. Perusal of section 123 for the said scheme under Finance Act shows that since the impugned order in original was announced just two days prior the locking date of the scheme i.e. 30.06.2018, hence to avail the benefit of said scheme, appellant should fall under said clause (e) of section 123 of the Finance Act. The appellant otherwise could not fall under any of the categories in clause (a) to (d) of section 123 - Perusal of these provisions makes it clear that to challenge the Order-in-Original of 28.6.2019, the appellant should not have filed the appeal before Commissioner (Appeals). This particular perusal makes it clear that till the scheme was announced same could not have been opted for. Hence till 01.09.2019, the time taken has genuinely been taken by the appellant. Catena of decisions have already held that there cannot be straight jacket formula to define the word sufficient cause or which can be applied to all cases without reference to the peculiar facts and facts and circumstances of a given case. Further, a liberal interpretation of the provisions has already been appreciated to be taken while deciding the case to condone delay for a sufficient cause. In the present matter since there is no substantial delay nor it was beyond such period as was not condonable by Commissioner (Appeals). Also department has brought nothing on record to falsify the submissions of the appellant as far as the sufficient cause shown is concerned. No deliberate delay nor any malafide intent is apparent on part of the appellant - Commissioner (Appeals) has failed to observe proviso to section 85 (3) A of the Finance Act, 1994. Commissioner (Appeals) is directed to decide the matter on merits after condoning the delay of 28 days - the appeal is hereby allowed by way of remand.

Summary

Issues Involved:
1. Whether the delay in filing the appeal before the Commissioner (Appeals) is justified by sufficient cause.
2. Whether the appellant's reason for delay, based on the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, constitutes a sufficient cause.
3. Whether the financial difficulties cited by the appellant justify the delay in filing the appeal.

Issue-wise Detailed Analysis:

1. Whether the delay in filing the appeal before the Commissioner (Appeals) is justified by sufficient cause:

The appeal was filed beyond the stipulated period of 60 days as required by section 85(3)A of the Finance Act, 1994. However, it was filed within the permissible extended period of 90 days. The primary issue was whether the reason for the delay constituted a "sufficient cause" under the proviso to section 85(3)A. The appellant argued that the delay was due to the time taken to opt for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and financial constraints. The Tribunal emphasized that there cannot be a straight-jacket formula to define "sufficient cause" and that the term should be interpreted in a reasonable, pragmatic, and liberal manner based on the facts and circumstances of each case.

2. Whether the appellant's reason for delay, based on the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, constitutes a sufficient cause:

The appellant received the order-in-original on 05.07.2019 and did not file an appeal within the initial 60 days to avail the benefits of the Sabka Vishwas Scheme, which came into effect on 01.09.2019. The scheme required that no appeal should be pending to qualify for the benefits under section 123(e) of the Finance Act, 2019. The Tribunal observed that the appellant's decision to delay filing the appeal until the scheme was announced was genuine. The scheme was beneficial to the assessee, and the time taken until its announcement on 01.09.2019 was considered reasonable.

3. Whether the financial difficulties cited by the appellant justify the delay in filing the appeal:

The appellant cited financial difficulties as the reason for not availing the scheme and subsequently filing the appeal. The appellant, being a contractor, faced irregular payments, which delayed the availability of sufficient funds to apply under the scheme. The Tribunal noted that the appellant filed the appeal immediately after realizing that they could not avail the scheme due to financial constraints. The Commissioner (Appeals) had deemed this reason insufficient to condone the delay. However, the Tribunal relied on several judicial precedents that advocate a liberal interpretation of "sufficient cause" to advance substantial justice. The Tribunal found no deliberate delay or malafide intent on the appellant's part and held that the financial difficulties constituted a sufficient cause for the delay.

Conclusion:

The Tribunal concluded that the Commissioner (Appeals) erred in not condoning the delay. The Tribunal emphasized that the disposal of cases on merits should be preferred over a hyper-technical approach. Given that the delay was not substantial and was within the condonable period, the Tribunal set aside the order of the Commissioner (Appeals) and directed the matter to be decided on merits after condoning the 28-day delay. The appeal was allowed by way of remand with specific directions to the Commissioner (Appeals).