2024 (9) TMI 931 - HC - Service Tax

Interpretation of Service Tax Mega Exemption N/N. 25/2012 for services provided to the Government Authority - liability of petitioner to pay the service tax for the services provided to the Government Authority - application seeking rectification of mistake by considering the submissions along with the annexure afresh - HELD THAT - In SANJEEV SURESH DESAI VERSUS UNION OF INDIA AND ORS. 2024 (6) TMI 1167 - BOMBAY HIGH COURT this Court has held that the concerned Appellate Authority cannot be blamed since it did not have the power to condone the delay. It was also recorded in paragraph No.5 that the Court was inclined to exercise it s jurisdiction under Article 226 of the Constitution of India particularly in view of Article 300A of the Constitution of India. We deem it appropriate to adopt the same course. On the merits of the impugned order dated 28.08.2023 passed by Respondent No. 3 as recorded below paragraph Nos. 3 and 4 hereinabove it is obvious that Respondent No. 3 dismissed the claim of the deceased on the sole ground that adequate documents were not placed on record to indicate that the said Proprietary firm was eligible for an exemption under Clause 12 of the Notification dated 20.06.2012 - It is also recorded in the impugned order that had the Noticee produced the documents in support of the claim for exemption the matter could have been looked at from that point of view. It was also recorded that the onus of placing such documents on record lay on the claimant. It was finally recorded that as the relevant documents were not before the said Authority the claim was rejected. The pending appeal belatedly filed by the Petitioner on 30.05.2024 shall stand disposed off from the file of the Appellate Court - petition allowed in part.

Summary

Issues:
1. Interpretation of Service Tax Mega Exemption Notification No. 25/2012 for services provided to the Government Authority.
2. Challenge to the order passed by the Additional Commissioner of Central Excise regarding Service Tax liability.
3. Burden of proof for claiming tax exemption under the Notification.
4. Appeal against the order under the Finance Act, 1994 and CGST Act, 2017.
5. Condonation of delay in filing the appeal under the GST Act.
6. Comparison of the present case with a similar case regarding the rejection of an appeal due to delay.
7. Request for setting aside the impugned order and providing an opportunity to submit necessary documents.

Analysis:

1. The Petitioner sought exemption from paying service tax to the Government Authority based on Notification No. 25/2012. The Petitioner argued that the services provided fell under the exemption categories specified in the notification, particularly Clause 12. The challenge arose from the Additional Commissioner's order demanding service tax, penalties, and interest for the specified period. The Additional Commissioner emphasized the onus on the claimant to prove entitlement to exemption, citing legal precedents that support strict interpretation of exemption notifications.

2. The Petitioner's grievance stemmed from the Additional Commissioner's order, which concluded that the Petitioner failed to provide sufficient documents to support the claim for exemption under the Notification. The Petitioner, being the widow of the deceased sole proprietor, contended that the entire work was with State Departments/State instrumentality, justifying the exemption under Clause 12. The order highlighted the absence of adequate records or documents, leading to the rejection of the claim for exemption.

3. The Petitioner appealed the order under the Finance Act, 1994, and the CGST Act, 2017. The legal representatives argued for the appeal's consideration, despite the likelihood of rejection due to a belated filing. Citing a similar case precedent, the advocate for the GST Department maintained that there was no provision for condonation of delay in the GST Act, suggesting the impending rejection of the appeal by the Appellate Authority.

4. Drawing parallels with a comparable case, the Court acknowledged the limitations on condoning appeal delays under the GST Act. The Court noted the Petitioner's lack of connection to the proprietary firm following her husband's demise, leading to mental distress and delayed action. The Court decided to dispose of the pending appeal as rejected, allowing the Appellate Authority to proceed accordingly.

5. The Court partially allowed the Petition, directing the disposal of the pending appeal and setting aside the impugned order. The Petitioner was granted an opportunity to submit necessary documents to the concerned Authority, with a specified deadline. The Court refrained from expressing any view on the merits of the case, leaving all contentions open for consideration by the Authority.