By TIOL News Service

BANGALORE, AUG 08, 2018: THE Assistant Commissioner of Service Tax issued a communication on 2.8.2017, to the petitioner regarding the outstanding dues payable, if not paid, or to furnish the proof of payment, if already paid.

The petitioner was unaware of the order-in-original passed by the Authority on 14.3.2017 . On receiving the communication from the service tax department dated 02.8.2017, the petitioner obtained the o-in-o in the month of September 2017 and, thereafter, filed an appeal before the Commissioner(Appeals-I) on 02.11.2017 along with an application for condonation of delay.

By the impugned order dated 04.12.2017 , the appeal has been rejected mainly on the ground that the Appellate Authority cannot condone the delay beyond the maximum extent of one month after the limitation prescribed under the provisions of Section 85(3A) of the Finance Act, 1994, wherein it is clearly stated that beyond the said outer limit of three months, there is no enabling provision for the Appellate Authority to either entertain the appeal or condone the delay.

It is against this order that the petitioner is before the Karnataka High Court.

It is submitted that the Commissioner(A) ought to have condoned the delay in order to do substantial justice and ought not to have rejected on technicality; that the appeal should have been decided on merits and which has not been done.

The counsel for the Revenue submitted that there is an inordinate delay in filing the appeal and, therefore, the Commissioner(A) was justified in dismissing the appeal.

The High Court inter alia observed –

+ In support of the application filed by the petitioner, he has also filed the affidavit of the Accounts Manager who has stated on oath that the impugned order came to be passed on 14.3.2017 and the same appears to have been received by the personnel managing the security at the office of Icon Hospitality Pvt., Ltd., during the last week of March 2017. Therefore, the last date for filing the appeal against the above referred order would be around 01.06.2017 which is within two months from the date of receipt of order and the appeal came to be filed on 27.10.2017. There is a delay of around 152 days.

+ When the rights of the parties are involved and substantial justice, technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It must be grasped that judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

Extracting from the Division Bench order dated 04.07.2016 in the case of PRACTICE STRATEGIC COMMUNICATIONS INDIA P. LTD.WP 13917 of 2016, wherein it is held that where an order passed has resulted in gross injustice it would be a case falling under the exceptional category for exercising the power under Article 226 of the Constitution and to interfere with the order, the High Court also relied upon the decision in APOTEX RESEARCH PVT. LTD. -   2017-TIOL-93-HC-KAR-CX wherein a similar view was taken.

Condoning the delay in filing the appeal, the impugned order passed by the Commissioner (Appeals) was held to be unsustainable and quashed. The matter was remanded for reconsideration of appeal on merits after giving an opportunity to the petitioner of being heard.

The petition was allowed in the above terms.

(See 2018-TIOL-1552-HC-KAR-ST)