2023 (3) TMI 1174 - HC - Service Tax

Recovery of Service Tax and penalty - execution of works-contract in various Government Departments of the State - It is the claim of the petitioner that for the works executed, VAT as applicable was already deducted by the authorities from the payments received - time limitation - HELD THAT - Section 85 of the Finance Act prescribes provision for appeal against any order passed under Sections 71, 72 and 73. Under Section 85(3) an appeal shall be presented within three months from the date of receipt of the decision or order of the Central Excise Officer provided if the concerned Officer is satisfied that sufficient cause prevented the appeal from being filed within the statutory period of three months, the same may be extended by a further period of six months. It is also noticed that under Section 84, there is a provision for revision of the orders by the Collector of Central Excise. Section 84(2) prescribes that no order which is prejudicial to the assessee shall be passed under this section unless the assessee has been given an opportunity of being heard - Sections 84 and 85 of the Finance Act, 1994 provides for statutory remedy against orders passed against the assessee. Time Limitation - HELD THAT - The benefit of extension of the limitation period from 15.03.2020 to 28.02.2022 will accrue to all persons concerned - this Court is of the considered view that the appellate authority is empowered to decide the claims of the petitioner vis- -vis the impugned order dated 2306.2022 passed by the Assistant Commissioner, Tezpur, CGST. Prima facie, it appears that the petitioner may be entitled to the benefit of the order of the apex Court dated 10.01.2022 whereby period of limitation was extended from 15.03.2020 to 28.02.2022 as well as subsequent Notifications issued by the Department pursuant to the order of the apex Court. As such, in view of the remedy of the statutory appeal available to the petitioner, the petitioner is permitted to approach the appellate authority assailing the impugned order dated 23.06.2020 - Petition disposed off.

Summary

Issues:
1. Liability to pay Service Tax
2. Failure to appear before Assessing Authority
3. Maintainability of the writ petition
4. Statutory remedy against orders passed against the assessee
5. Extension of the limitation period for judicial and quasi-judicial proceedings

Issue 1: Liability to pay Service Tax
The petitioner, engaged in works-contract with various Government Departments, contested the imposition of Service Tax by the Assistant Commissioner, CGST. The petitioner argued that VAT deductions were already made by the authorities for the works executed, hence claiming exemption from Service Tax. Despite responding to the Show Cause Notice and submitting relevant documents, the petitioner failed to appear before the Assessing Authority due to miscommunication and subsequent lockdown caused by the COVID-19 pandemic. The High Court acknowledged the petitioner's contention and directed the petitioner to approach the appellate authority for redressal.

Issue 2: Failure to appear before Assessing Authority
The petitioner, due to miscommunication and subsequent lockdown, failed to appear before the Assessing Authority as scheduled. The High Court considered these circumstances and permitted the petitioner to file an appeal, acknowledging the challenges faced by the petitioner in availing the statutory remedy during the COVID-19 pandemic.

Issue 3: Maintainability of the writ petition
The Standing Counsel objected to the maintainability of the writ petition, citing the availability of an alternative remedy through an appeal under Section 85 of the Finance Act, 1994. The petitioner's counsel argued that the petitioner was unable to avail the statutory remedy due to the COVID-19 situation. The High Court allowed the petitioner to file an appeal, considering the exceptional circumstances.

Issue 4: Statutory remedy against orders passed against the assessee
Sections 84 and 85 of the Finance Act, 1994 provide statutory remedies against orders passed against the assessee. The High Court emphasized the importance of availing the statutory appeal mechanism and directed the petitioner to approach the appellate authority to address the grievances raised in the writ petition.

Issue 5: Extension of the limitation period for judicial and quasi-judicial proceedings
Referring to the order of the Apex Court extending the limitation period for judicial and quasi-judicial proceedings, the High Court recognized the benefit of the extended period from 15.03.2020 to 28.02.2022. The Court directed the petitioner to file an appeal within four weeks from the date of the judgment, allowing for the benefit of the extended limitation period.

This detailed analysis of the judgment highlights the key issues addressed by the High Court in the case, providing a comprehensive overview of the legal considerations and directions given to the parties involved.