2013 (6) TMI 52 - HC - Service Tax

Condonation of delay - Advocate due to problems in his matrimonial life did not pay attention as a result of which the appeal could not be filed within the prescribed period of limitation. - held that - There is no legal provision which provides for condoning the delay in filing the appeal on a condition of depositing 50% of the tax amount. The delay in filing the appeal is condoned or refused depending upon the sufficiency of cause for delay. If the party is found to be prevented by a sufficient cause to the satisfaction of the Appellate Authority/Tribunal the delay is condoned and if not found to be prevented by a sufficient cause the delay is not condoned. - matter restored before tribunal for fresh decision.

Summary

Issues:
Petition to quash order of Customs, Excise and Service Tax Appellate Tribunal. Delay in filing appeal. Condonation of delay. Condition of depositing 50% of tax for condonation of delay. Mixing up of issues of condonation of delay and relief for stay.

Analysis:
The petitioner, a proprietorship firm with a cable network, was assessed for service tax for 2002-03 to 2006-07, resulting in a tax liability and penalties under Sections 76, 77, and 78 of the Finance Act. An appeal was filed, partially allowed, and penalties confirmed. Dissatisfied, the petitioner filed an appeal with an application for stay before respondent no. 2, Customs, Excise and Service Tax Appellate Tribunal, with a delay of 259 days, seeking condonation of delay. The delay was attributed to the previous advocate's personal issues. Respondent no. 2, during the hearing, directed the petitioner to deposit 50% of the tax amount for condonation of delay and disposed of the application for stay in the same order.

The main contention was that the requirement to deposit 50% of the tax for condonation of delay was contrary to law. The petitioner argued that the delay should be condoned based solely on whether there was a sufficient cause for the delay in filing the appeal. The legal position was clarified that the decision to condone delay rests on whether there was a sufficient cause, not on the deposit of a specific amount. Mixing up the issues of condonation of delay and relief for stay was deemed improper.

The High Court quashed the impugned order and directed respondent no. 2 to decide the condonation of delay application solely on its merits without requiring the deposit of 50% of the tax amount. It was emphasized that the decision on condonation of delay should be based on whether there was a sufficient cause for the delay. A fresh order on the application for stay was to be passed if the appeal was ultimately admitted. The petition was allowed with no costs awarded.