2015 (7) TMI 389 - HC - Service Tax

High Court overturns Tribunal's dismissal of appeal for delay, emphasizing cause over length.

SOLUX GALFAB PVT. LTD. Versus COMMISSIONER OF SERVICE TAX, KOLKATA

The High Court of Calcutta set aside the Tribunal's order dismissing an appeal due to a 21-day delay in filing, emphasizing the sufficiency of the cause ... Condonation of delay - Exparte order - delay of 21 days - Determination of quantum of the Service Tax - Held that:- Tribunal should adopt a lenient approach in dealing with an application for condonation of delay. Length of delay is not material but sufficiency of the cause is. Delay of longer period may be condoned if sufficient cause is made out but the delay of shorter period may not be condoned in absence thereof. The approach of the Tribunal should not be such to find a fault in the application seeking delay but should encourage the litigation to be decided on merit. Furthermore, when an order is passed ex parte and the defaulting litigant approaches the Tribunal showing cause of non-appearance, the Tribunal should not act harshly by simply recording that petition does not show that the petitioner was prevented by sufficient cause. Furthermore, the Tribunal has misconstrued the application to be an application for review when proviso to Rule 20 of the Customs, Excise and Services Tax Appellate Tribunal (Procedure) Rules, 1982 provides for setting aside ex parte order of dismissal provided a sufficient cause is made out. - Tribunal invoked the wrong provision and therefore, the order impugned is unsustainable in law. This Court on perusing the averments made in the miscellaneous application finds that the petitioner has made out a case, which constitutes the sufficient cause. This Court finds that the petitioner was prevented by sufficient cause in not appearing on the day when his application for condonation of delay was decided ex parte. - Tribunal directed the decide the matter afresh. Issues:1. Condonation of delay in filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal.2. Application for restoration of appeal and condonation of delay.3. Interpretation of Rules governing setting aside ex parte orders by the Tribunal.Analysis:The judgment by the High Court of Calcutta pertains to a case where the petitioner was accused of evasion of service tax and non-payment amounting to a significant sum. The petitioner had already deposited a substantial amount but contested further liability. The Tribunal dismissed the appeal due to a delay of 21 days in filing, despite an application for condonation of delay. The High Court emphasized that the sufficiency of the cause for delay is crucial, rather than the length of delay. It criticized the Tribunal for not adopting a lenient approach and highlighted that the application was for setting aside an ex parte order, not a review. The Court clarified the distinction between review and setting aside an ex parte order under the relevant rules.In its analysis, the High Court pointed out that the Tribunal erred in invoking the wrong provision and termed the impugned order as unsustainable in law. The Court found that the petitioner had presented a case constituting sufficient cause for the delay. Consequently, the High Court set aside the impugned order, allowing the restoration of the application for condonation of delay. The Tribunal was directed to schedule a hearing promptly and decide on the matter in accordance with the law, within a specified timeframe to ensure expeditious resolution.The judgment concluded by expressing hope that the Tribunal would handle the application swiftly and efficiently, aiming for a resolution within four weeks from the date of communication of the High Court's order. The writ petition was disposed of without any cost implications. The ruling underscored the importance of procedural fairness and adherence to legal principles in dealing with applications for condonation of delay and setting aside ex parte orders, ensuring justice is served promptly and effectively.