2024 (12) TMI 87 - HC - Service Tax

Condonation for the 525 day delay in instituting the appeal - refund of tax wrongly paid - HELD THAT - There was some communication gap and no leave may have sought to withdraw the application. In any event, even assuming that such leave was sought, the same was on the mistaken premise that the matter related to the tax rebate and therefore, the appeal may not have been maintainable. The case does not involve tax rebates. It concerns a refund of tax wrongly paid. Therefore, the appeal filed by the Appellant before the tribunal would have been maintainable and, in these peculiar circumstances, should have been restored by the tribunal. The tribunal s orders dated 22 February 2023 and 5 April 2022 set aside - the Appellants Service Tax Appeal No. 86121 of 2020 restored to the tribunal's file - appeal allowed.

Summary

Issues:
Condonation of delay in instituting the appeal, dismissal of appeal by the tribunal, restoration of appeal, refund of tax wrongly paid, maintainability of appeal.

Condonation of Delay:
The High Court considered an application seeking condonation for a 525-day delay in instituting the appeal. The Court found that the delay was adequately explained, and no mala fides were involved. The applicant had not gained any undue benefits from the delay, as it was a case where a refund was being claimed. The delay was condoned after considering all circumstances.

Dismissal of Appeal by Tribunal:
The appellant filed a refund application for tax paid, contending it was not payable. Despite partial relief granted, the refund claim was ultimately denied. The tribunal dismissed the appeal as withdrawn, suggesting the appellant should approach another forum due to the issue involving a "rebate of tax." The appellant sought restoration, but the tribunal dismissed the application. The High Court noted that the withdrawal was prompted by the tribunal's inclination to dispose of the appeal as non-maintainable. The Court found that the matter was about a refund of tax wrongly paid, not a tax rebate, making the appeal maintainable. The High Court set aside the tribunal's orders and restored the appeal for a decision on merits.

Refund of Tax Wrongly Paid:
The appellant applied for a refund of service tax wrongly paid on speed post services. Despite initial rejection and partial allowance, subsequent refund claims were denied by the adjudicating authority and the tribunal. The High Court clarified that the case involved a refund of tax wrongly paid, not tax rebates, emphasizing the maintainability of the appeal and the need for restoration.

Maintainability of Appeal:
The High Court emphasized that the appeal concerning a refund of tax wrongly paid was maintainable. The Court found that the withdrawal of the appeal by the tribunal was based on a mistaken premise regarding the nature of the issue. The Court directed the tribunal to restore the appeal and decide it on merits, leaving all contentions on merits open for the tribunal to decide.

In conclusion, the High Court allowed the appeal, set aside the tribunal's orders, and restored the appellant's appeal for a decision on merits. The Court clarified that it had not examined the merits of the matter and left all contentions on merits to be decided by the tribunal. No costs were awarded, and all parties were directed to act on an authenticated copy of the order.