2023 (12) TMI 1011 - HC - Service Tax

Maintainability of appeal - appeal dismissed on the ground of being filed beyond the period of limitation - cessation of right of petitioner to get legitimate relief which involves a wide range of legal interpretations as well as involves the same question of law for the previous and subsequent assessment years, for which the same elucidation is involved - compliance with the principles of natural justice or not - HELD THAT - Under normal circumstances this Court would not exercise any discretion in the matter on account of clear statutory mandate for fixing time limit for preferring an appeal before the Commissioner of Appeals. However, considering the fact that the appellant is a local authority and the issues which have been the subject matter of adjudication before the authority culminating in an order dated 24th August, 2017 are all recurring issues, the appellant, in our opinion, should be granted one opportunity to agitate their contentions so that a decision on merits is arrived at rather non-suiting the appellant municipality on a technical ground. This discretion cannot be exercised in all cases and this Court is of the view that the case on hand is a rare case where the municipality is contesting demand raised by the Service Tax Commissionerate. That apart, in all probabilities the appellant would have complied with the pre-deposit condition while preferring the appeal before the learned Tribunal. The order passed by the learned Tribunal as well as the order passed by the Commissioner of Appeals is set aside and the appeal stands restored to the file of the Commissioner of Appeals, Siliguri - Appeal allowed.

Summary

Issues involved:
The appeal challenging the order passed by the Service Tax Appellate Tribunal, Eastern Zone Bench, Kolkata dated 19.6.2023 under section 35G of the Central Excise Act, 1944 involves substantial questions of law regarding the justification of passing the order without considering the merit of the case and dismissing the appeal on the ground of limitation, and whether the Tribunal has deprived the appellant of legitimate relief involving legal interpretations and principles of natural justice.

Issue 1:
The appellant, a municipality, received a show cause notice demanding service tax for various activities. The Joint Commissioner partially accepted the case but confirmed a demand of service tax and imposed penalties. The appeal before the Commissioner [Appeals] was dismissed as time-barred. The Tribunal upheld this decision based on the statutory time limit under the Finance Act, 1994. However, considering the appellant's status as a local authority and the recurring nature of the issues, the High Court exercised discretion, allowing the appeal to be restored for a decision on merits.

Issue 2:
The appellant municipality, in its appeal before the Commissioner of Appeals, sought condonation of delay due to various reasons, including inability to provide necessary records during Durgapuja vacation, illness of the authorized representative, and the impact of demonetization announced by the Government of India. Despite the clear statutory time limit for filing appeals, the High Court, recognizing the peculiar circumstances of the case and the diligence shown by the appellant in contesting the show cause notice, decided to grant an opportunity for the appellant to present their contentions and have a decision on merits.

Separate Judgement:
The High Court allowed the appeal, setting aside the orders of the Tribunal and the Commissioner of Appeals, and restored the appeal to the file of the Commissioner of Appeals, Siliguri for a fresh decision on merits and in accordance with the law. The Court emphasized that this judgment should not be considered a precedent, leaving the substantial questions of law open for future cases. The appellant municipality was directed to cooperate for the expeditious disposal of the appeal without seeking unnecessary adjournments.