1/11 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 12TH DAY OF DECEMBER, 2017 BEFORE THE HON'BLE Dr.JUSTICE VINEET KOTHARI WRIT PETITION No.27478 OF 2016 (T-RES) Between:
M/s. Sri Kanaka Durga Developers (Dissolved Firm) Rep.by its Erstwhile partner, Sri. G. Dasaratharami Reddy Aged about 59 years No.303, Shri Lakshmi Nest Apartment No.841/B, 5th Cross, 10th Main HAL IInd Stage, Indiranagar, Bangalore. 560 038.
…Petitioner (By Mr.S. Annamalai & Mr. M. Lava, Advocates) And:
1. The Assistant Commissioner of Service-Tax, Office of the Assistant Commissioner of Service Tax, Division-III Service Tax Commissionerate No.16/1, S.P. Complex, Lalbagh Road, Bangalore -560 027. Present Address:
Office of the Assistant Commissioner Of Service Tax Traffic Transit Management Centre, BMTC Building, Above BMTC Bus Stand, Domlur, Old Airport Road, Bangalore – 560 071.
2. The Commissioner of Service Tax (Appeals), Office of the Commissioner of Service Tax (Appeals), Traffic Transit Management Centre, BMTC Building, 4th Floor, Above BMTC Bus Stand Domlur, Old Airport Road, Bangalore – 560 071.
(Mr.K.V. Aravind, Advocate) **** … Respondents This Writ Petition is filed under Articles 226 & 227 of the Constitution of India, praying to issue a writ of certiorari and direction in the nature of a writ of certiorari quashing the order in original passed by the Respondent No.1 vide No.35/2010 dated 12.11.2010 for the period April, 2005 to March, 2006 herein marked as Annexure A; issue a writ of certiorari and direction in the nature of certiorari quashing the order in appeal passed by the Respondent No.2 vide No.478/2015 dated 26.11.2015 herein marked as Annexure B and issue a writ of mandamus and direct the Respondent No.2 to adjudicate the grounds of appeal filed by the petitioner by holding that there is no delay in filing the appeal as per the provisions of Section 85(3A) of the Finance Act, 1994, etc.
This Writ Petition coming on for Preliminary Hearing in ‘B’ Group, this day, the Court made the following:-
O R D E R Mr.S. Annamalai & Mr. M. Lava, Advocates for Petitioner Mr.K.V. Aravind, Advocate for Respondents 1. This writ petition is filed with the following prayers:
“(a) Issue a writ of certiorari and direction in the nature of a writ of certiorari quashing the order in original passed by the Respondent No.1 vide No.35/2010 dated 12.11.2010 for the period April, 2005 to March, 2006 herein marked as Annexure A;
(b) Issue a writ of certiorari and direction in the nature of certiorari quashing the order in appeal passed by the Respondent No.2 vide No.478/2015 dated 26.11.2015 herein marked as Annexure B;
(c) Issue a writ of mandamus and direct the Respondent No.2 to adjudicate the grounds of appeal filed by the petitioner by holding that there is no delay in filing the appeal as per the provisions of Section 85(3A) of the Finance Act, 1994;
(d) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.”
2. Learned counsel appearing for the Commissioner of Appeals submitted that the Commissioner has no power to condone the delay beyond the period of 30 days in terms of Section 35(1) of the Central Excise Act, 1944, which provides for a period of 60 days for filing an Appeal and the proviso thereto empowers the Commissioner of Appeals to condone the delay, provided such an Appeal is filed within 30 days after the said prescribed period of 60 days. Section 35(1) of the Act reads as under;
“ 35. Appeals to Commissioner (Appeals) – (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer lower in rank than a Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeals) hereafter in this Chapter referred to as the Commissioner (appeals) within sixty days from the date of the communication to him of such decision or order:
Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.”
3. Learned counsel for the petitioner-assessee Firm has submitted that the certified copy of the order- in-original dated 12/11/2010 was received by the petitioner-Firm on 14/08/2013, and without any delay, the petitioner- Firm has filed the appeal before the Respondent No.2 - Authority within two months from that date, i.e. on 08/10/2013, but the said Authority, without appreciating the submission of the petitioner - Firm that there was no delay in filing the appeal from the date of receipt of the certified copy of the order-in-
original, held that the Appeal is not admitted and dismissed the appeal on the ground that there was a delay of 32 months in filing the appeal and that the said Authority is not vested with the power to condone the delay beyond a period of 90 days.
4. However, he submitted that since the impugned adjudication order suffers from illegality, the delay deserves to be condoned by this Court in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India and the Respondent- Commissioner of Appeals may be directed to decide the appeal on merits. He relied upon a Division Bench decision of this Court in the case of M/s.Practice Strategic Communications India Private Limited – versus- The Commissioner of Service Tax, in WP No.13917/2016 decided on 04.07.2016, wherein this Court has held as under;
“11. In view of the above referred decision of this Court, if this Court finds that the authority has passed the order without jurisdiction or has exercised the power in excess of the jurisdiction or by over-stepping or crossing the limit of jurisdiction or that there is failure of justice, or it 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 of the original authority or the appellate authority, as the case may be. In order to find out as to whether the case is fit for exercising of the power under Article 226 of the Constitution, we may record that as per the decision of the Delhi High court, Rule 5, on the basis of which the original authority has passed the order for levying the tax is held to be ultra vires to Sec.67 of the Act. Further, the matter may fall in the realm of correct interpretation of Sec.67 as to whether the expenses reimbursed by the consumer to the service provider, can be included for the purpose of computation of the service tax or not. We do not propose to express any further view on the said aspects in view of the order which we may pass herein after, but suffice it to observe that in view of the decision of the Delhi High Court, there was a strong case on merits on the part of the petitioner to be considered by the taxing authority. Unfortunately the decision of the Delhi High Court though was specifically brought to the notice of the original authority in the reply to the show cause notice, in the impugned order of the original authority, there is no reference whatsoever. Under these circumstances, we find that the case may fall in the exceptional category for exercise of the power under Article 226 of the Constitution.
Xxx xxx Xxx xxx 15. After the aforesaid condition is complied with, the matter shall stand restored on the file of the Commissioner (Appeals) with a further direction that he shall consider the appeal on merits in the light of the observations made by this Court in the above judgment and after giving opportunity of hearing to all concerned.
16. It is made clear that the appeal shall be decided within a period of three months from the date of compliance of the condition of deposit of the amount and cost to the respondent. It is also observed that the contentions of both the sides shall remain open to be considered before the appellate authority.
The petition is allowed in the above terms. Rule made absolute.”
5. Learned counsel for the petitioner-Firm Firm further submitted before this Court that the pre-deposit conditions for maintaining the said appeal have been complied with by the petitioner-Firm.
6. However, it is the case of the Respondent Authority that the Order in original dated 12/10/2010 was duly served on the petitioner- Firm at its registered address and the new address of the business premises to which the petitioner – Firm has relocated was not intimated to the Department and accordingly he dismissed the appeal, holding that the said Authority had no power to condone a delay beyond the maximum period of 90 days.
7. In view of the aforesaid, this Court is of the opinion that the delay deserved to be condoned by the Commissioner of Appeals. However, in view of the statutory limit on his powers, this Court exercising its extraordinary jurisdiction is of the opinion that the said delay deserves to be condoned. It is hereby condoned.
8. Moreover this Court is of the opinion that discretion ought to have been given to the Appellate Authorities under the Act to condone such delays, if caused by sufficient reason. Be that as it may.
9. In the present case, the delay of 32 months as stated in the impugned order in filing the appeal is condoned and the appeal is restored to the file of the Respondent-Commissioner of Appeals, with a direction to the said Authority to decide the appeal on merits in accordance with law, subject to his satisfaction of the required pre-deposit conditions for maintaining such appeal having been satisfied by the petitioner- Firm.
10. The petitioner-assessee Firm may appear before the said Authority in the first instance on 08-01-2018 and thereafter the appeal may be decided within a period of three months.
The present Writ Petition is disposed of accordingly. No costs.
Sd/- JUDGE BMV*