Delay in filing appeal is condonable only on satisfactory cause.

PJ/CASE-LAW/2015-16/2758

Case:-COMPETENT AUTOMOBILES CO. LTD. VERSUSCOMMR. OF SERVICE TAX, NEW DELHI

Citation:-2015 (38) S.T.R. 238 (Tri. - Del.)

Brief facts:-The assessee preferred this appeal on 3rd April 2013 against the Order-in-Original No. 33/VKG/2007, dated 27-9-2007 passed by the Commissioner (Service Tax), New Delhi confirming Service Tax levy of Rs. 1,26,48,080.91 apart from interest under Section 75 for providing Business Auxiliary Service during February 2004 to March 2006, on the gross commission received from Maruti Finance, a unit of Maruti Udyog Ltd. Rs. 24,65,694.27 already remitted by the assessee was appropriated and is so recorded in the order.
Against the adjudication order, the assessee filed writ petition (Civil No. 8089/2012) along with miscellaneous application No. 20133 of 2012 before the Delhi High Court. By the order dated 21-12-2012, the High Court dismissed the writ petition as withdrawn, granting liberty to seek appropriate statutory remedies by way of rectification and/or revision as the case may be, in terms of such request addressed by the Counsel for the appellant herein, before the High Court.
Thereafter the assessee filed Service Tax Appeal No. 4175 of 2012 against a notice demanding remittance of the adjudicated liability. This appeal was dismissed as withdrawn on 19-3-2013 granting liberty to the assessee to file an appeal challenging the adjudication order. Thereafter the present appeal was filed on 3-4-2013. The assessee seeks condonation of a delay of 1916 days, pleading the above circumstances as justification therefore.

Appellant’s contention:-Ld. Counsel for the appellant refers to the judgment in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy & Ors. - 2014 All India Services Law Journal (page 20) for the proposition that the expression “sufficient cause” in the statute of limitation must receive a liberal construction; the principles governing limitation should apply appropriately, depending on the facts and circumstances of a given case; that once a valuable right has accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take away that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party; that justice must be done to both parties equally; however, there should be a liberal, pragmatic, justice-oriented and a non-pedantic approach applied for consideration of an application for condonation of delay.

Respondent’s contention:- In 1968, a Constitution Bench in Trilokchand Motichand and others - AIR 1970 Supreme Court 898 an occasion to consider whether belated or stale claims are bound to be considered when presented in a writ petition filed under Article of the Constitution. Chief Justice Hidyatulla in concurring opinion (with concurrences recorded by Justices Bachawat and Mitter; Justices Hegde and Sikri dissenting) clearly ruled that the Court will not inquire into belated and stale claims or take note of evidence of neglect of one’s own rights for a long time. Majority pointed out that the Court would not only but should not entertain the stale claim. Court ruled that utmost expedition is the sine qua non for presenting the claim for adjudication; the party aggrieved must move the Court at the earliest possible time to explain satisfactorily all semblance of delay.

Reasoning of judgment:- In the facts and circumstances of this case, it is apparent that the adjudication order dated 27-9-2007 was challenged by the assessee by way of writ petition in 2012 after lapse of five years and withdrew the writ petition, obtaining liberty to pursue appropriate statutory remedies. Thereafter, the assessee filed an appropriate appeal against the order of demand and not the adjudication order. This appeal was dismissed as withdrawn on 19-3-2013. Thereafter is the present appeal filed on 3-4-2013 with a delay of nearly six years (1916 days). The adjudication order dated 27-9-2007 is to be nullity for patent lack of jurisdiction. It is a formal order passed by the authority exercising statutory powers authorizing assessment of Service Tax liability. Finance Act, 1994 clearly provides an appellate remedy to be pursued within three months from the date of order of which the assessee is aggrieved.
In the circumstances, the petitioner/assessee cannot gainfully contend that it had a reasonable or bona fide reason in not pursuing the appellate remedy, within limitation period of three months. This application does not plead any satisfactory cause for condonation of the delay of 1916 days in preferring appeal.
In the aforesaid circumstances, there are no merits nor any satisfactory cause shown for condoning the delay. The application for condonation of delay is therefore dismissed. Consequently, the appeal stands rejected.

Decision:-Application dismissed/Appeal rejected

Comment:- The analogy of the case is that assessee cannot gainfully contend reasonable cause or bona fide reason in not pursuing appropriate remedy within limitation period of 3 months without proving the same. The present application fails as there was no satisfactory cause for delay. This indicates that every delay cannot be condoned unless and until it is supported by valid and genuine reasons.

Prepared by:- Monika Tak

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PJ/CASE-LAW/2015-16/2758

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