2018 (5) TMI 2080 - HC - Central Excise

Estoppel & Limitation Rejection Overturned: Commissioner [Appeals] Directed to Decide on Service Tax Appeals

The Executive Officer, Kaveripattinam Selection Grade Town Versus The Commissioner of Central Excise Appeals O/o. The Commissioner of Central Excise Salem, The Deputy Commissioner of Central Excise Service Tax Cell, Hosur-I Division, Thally Road, The Assistant Commissioner of Central Excise Hosur-I District, The Branch Manager Indian Bank, Kaveripattinam Branch Krishnagiri District

The Court overturned the rejection of a mandamus prayer by a Panchayat against the Commissioner [Appeals] for not disposing of statutory appeals ... Levy of Service Tax - services provided by the Municipality - Executive Officer of the Town Panchayat / appellant has accepted to pay the tax - belated filing of appeal - no provisions for condonation of delay - rejection of appeal on the ground of estoppel - HELD THAT:- The rejection of the claim of the appellant on the ground of estoppel cannot be sustained. There cannot be any estoppel against statute and if it is found that some of the services, on which service tax is sought to be levied, are actually exempted from the purview of the service tax. The concession or an admission of liability by the officials cannot be a ground to reject the challenge to the very levy of the service tax. The Commissioner [Appeals] is directed to pass orders on the appeals filed by the appellant/Panchayat - appeal allowed. Issues:Prayer for mandamus to direct Commissioner [Appeals] to dispose of statutory appeals challenging service tax levy - Rejection based on estoppel and limitation grounds.Analysis:The appellant, a Panchayat, sought mandamus to direct the Commissioner [Appeals] to dispose of statutory appeals challenging the service tax levy by the Municipality. The rejection by the learned Single Judge was based on two grounds: first, the Executive Officer accepted to pay the tax, and second, the appeal was considered belated with no provision for condonation of delay. The appellant argued against the estoppel, citing the Doctrine that there is no estoppel against the statute. The appellant contended that some services provided by Municipalities are exempt from service tax under the Mega Notification. Additionally, reliance was placed on a previous court order directing the Commissioner [Appeals] to entertain a belatedly filed appeal.The Senior Panel Counsel for the respondents argued that the exemption claim had no basis and, due to the appeal being time-barred, it could not be entertained by the Commissioner [Appeals]. The Court opined that the rejection based on estoppel was not sustainable, emphasizing that there can be no estoppel against a statute. If certain services are exempt from service tax, any admission of liability by officials cannot be a reason to dismiss the challenge to the tax levy. Consequently, the Court directed the Commissioner [Appeals] to decide on the appeals filed by the appellant within four weeks, allowing the writ appeal and overturning the Single Judge's order dismissing the writ petition. No costs were awarded, and the connected miscellaneous petition was closed.