In Writ Petition No. 20662 of 2021 -MP HC- Madhya Pradesh High Court rules Commissioner (Appeals) can only condone delay for an additional period of one month beyond the prescribed limitation period; Upholds dismissal of M/s Hemant Singh Bais's appeal on ground of limitation
Justice Ravi Malimath & Justice Vishal Mishra [11-07-2023]

Read Order: M/s Hemant Singh Bais V. The Assistant Commissioner and Ors

Chahat Varma

New Delhi, August 3, 2023: In a recent decision, the Madhya Pradesh High Court has upheld the dismissal of M/s Hemant Singh Bais's (petitioner) appeal on the ground of limitation. The Court affirmed that the Commissioner (Appeals) lacked the authority to condone a substantial delay beyond the permissible one-month period, as per the provisions of the Finance Act, 1994.

The petitioner in this case was a contractor, engaged in the execution of works contracts for government departments and local authorities. His activities were exempted from service tax under Notification No.25/2012-ST dated 20.06.2012. However, the department, initiated adjudication proceedings against the petitioner based on some received information. The petitioner contested that he was not liable to pay service tax as per the aforementioned notification. Despite his demonstration, the adjudicating authorities passed an order-in-original on 26.09.2019, determining certain demands and levying penalties. The petitioner claimed that he was never served with the said order. The petitioner contended that there was non-compliance with Section 37C of the Central Excise Act, 1944, as the service of the order should have been effected on him or his authorized agent. However, this was not done. Subsequently, the petitioner filed an appeal against the impugned order to the Commissioner (Appeals). The Commissioner (Appeals) dismissed the appeal on the grounds that it was highly delayed and should have been filed within a maximum period of three months, in accordance with Section 85 of the Finance Act, 1994.

Upon reviewing the records, the bench of Justice Ravi Malimath and Justice Vishal Mishra noted that the order passed by the authorities on 26.09.2019 was indeed served on an individual named Shivpal Singh. The petitioner, had further admitted in his application filed under the Right to Information Act that he received a letter from the Range Superintendent, Sehore on 04.12.2020, wherein he was asked to pay service tax along with interest in compliance with the impugned order. This indicated that the petitioner had knowledge of the passing of the impugned order on 04.12.2020.

The bench clarified that according to Section 85 of the Finance Act, 1994, appeals must be filed within two months from the date of receipt of the decision or order by the adjudicating authority. The Commissioner of Central Excise (Appeals) has the authority to condone the delay in filing the appeal if valid reasons are provided. However, the Commissioner can only condone the delay for an additional period of one month beyond the prescribed limitation period. In this particular case, the petitioner had filed the appeal after a delay of one and a half years from the date of passing the impugned order. As a result, the bench ruled that the Commissioner (Appeals) can only condone delays that were within the one-month extension and does not have the power to condone delays exceeding 30 days.

Thus, the dismissal of the petitioner's appeal on the ground of limitation by the appellate authority was deemed legally valid. The bench found no reason to interfere with the impugned order, as it was considered just and proper.