Service Tax: Condonation of delay in filing of appeal before Commissioner(Appeals)

[ROHIT GOEL]

Dear Sir,

Please examine the facts of case:

Ex parte service tax adjudication order for the period of 1-4-2010 to 31-3-2012 in case of assessee was passed on 02.07.2018 and received on 23.07.2018. On 27.07.2018 assessee filed rectification application and on advise of counsel waited for rectification before filing appeal. Thereafter on 22.02.2019 recovery notice received and again on 27.02.2019 assessee filed another rectification. Since no reply was received till April, assessee filed appeal on 29.04.2019. This has resulted delay of 218 days. On hearing, Commissioner dismissed the appeal being barred by limitation u/s 85(3A) of FA 1994 and did not pass any judgment on merit.

The judgment of various benches of ITAT including Chandigarh as well as P&H HC (2017 (11) TMI 1712 - PUNJAB AND HARYANA HIGH COURT-DIRECTOR, POST GRADUATE INSTITUTE OF MEDICAL EDUCATION AND RESEARCH, CHANDIGARH VERSUS THE COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX (APPEALS) , CHANDIGARH AND OTHERS) state that Commissioner has no power u/s 85(3A) to condone delay beyond 1 month.

Total demand raised ₹ 28 lakh out of which ₹ 22 lakh being paid but credit not allowed on the persumption that returns not filed whereas infact such returns were filed by the assessee. Further, Adjudication officer invoked extended period of limitation on the basis that returns were not filed and assessee was claiming abatement available to commercial and industrial construction service providers whereas assessee is providing works contract services.

Opinion requested:

1. Is there any way to contest before CESTAT to delay condone of 218 days in filing appeal before Commissioner Appeals caused due to advise of counsel ?

2. Rectification for allowing prepaid taxes and wrongly invoking extended period of limitation was filed but not decided by Department? What is the remedy and in case the same is rejected, can ground of allowance of prepaid taxes and incorrect invocation/time barring be contested in appeal against the order of rectification?

[KASTURI SETHI]

Double entry. Reply already filed.

[Kashish Gupta]

Dear Rohit Ji

The advisable course of action is to proceed jurisdictional High Court and get the petition admitted on merits. For this, the reliance can be made on the decision of Hon'ble Allahabad High Court in case of M/s Shailendra Eat Udyog v State of U.P. and 3 Others (2019) in Writ Tax No. - 1712 of 2018 passed on 18-1-2019 = 2019 (1) TMI 1418 - ALLAHABAD HIGH COURT. The abstract of this decision is given below for ready reference and understanding:

1. In view of the decision of the Supreme Court in the case of Singh Enterprises v Commissioner of Central Excise, Jamshedpur reported in 2008 (3) SCC 70 = 2007 (12) TMI 11 - SUPREME COURT paragraph no. 8 as also the Full Bench decision of Allahabad High Court in Commissioner of Income Tax I; Commissioner of Income Tax Central; Janpad Thok Kendriya Upbhokta Sahkari Bhandar Limited v Mohd Farooq; New Cawnpore Floor Mills Pvt Ltd; Commissioner of Income Tax reported in 2009 (317)  ITR 305 = 2009 (9) TMI 5 - ALLAHABAD HIGH COURT, the delay condonation application filed beyond the period of thirty days could not be condoned and it was clearly not maintainable by the appellate authority.
2. It was held that there is no error in the order of the appellate authority dismissing the appeal as time barred.
3. However, even if the remedy of appeal is held to be non-existant, still jurisdiction of the writ Court against the original order may not be ousted. Therefore, it was found that the matter requires consideration.
4. Accordingly, the writ petition was admitted subject to the petitioner depositing 50% of the disputed amount of tax and furnishing security for the balance amount of disputed tax in the shape of other than cash and bank guarantee.

Regards

CA Kashish Gupta

85108-06440

AI Summary

Delay condonation power limited: challenge time bar dismissal via writ relief and pursue rectification remedies with security conditions. Delay in filing an appeal after an ex parte service tax order resulted in dismissal as time barred; multiple rectification petitions on prepaid tax credits and invocation of extended limitation were filed before the appeal. Where the appellate authority refuses condonation, the advised remedial course is to pursue writ proceedings, often conditioned on deposit and security, and to press rectification claims administratively and, if rejected, on further judicial challenge.