M/S. Mahalaxmi Enterprises vs. The Commissioner Of Customs And Central Tax

Facts

The petitioner, M/s. Mahalakshmi Enterprises, filed a writ petition before the Telangana High Court challenging two orders. The first order, an Order-in-Original dated January 29, 2024, was passed by the Joint Commissioner of Central Tax for the financial years 2016-17 and 2017-18 (up to June 2017) under the Service Tax Act. The second impugned order, an Order-in-Appeal dated April 30, 2025, was passed by the Commissioner of Customs and Central Tax, Appeals-I, rejecting the petitioner's appeal on the ground of limitation without providing a hearing. The petitioner contended that the Order-in-Original was barred by limitation under Section 73 of the Finance Act, 1994, and that the extended period of limitation was not applicable. The petitioner also argued that the Order-in-Appeal was arbitrary and violative of natural justice.

Held

The High Court disposed of the writ petition with liberty to the petitioner to prefer an appeal before the learned CESTAT with statutory pre-deposit, if any, within a period of two weeks. The Court directed that if the appeal is preferred within the stipulated period, the learned CESTAT shall consider the question of delay in approaching it, taking into account the time spent by the petitioner in pursuing the writ petition before the High Court, and then take a decision in accordance with law. The Court explicitly stated that it had not made any observations on the merits of the case. The impugned Order-in-Original was dated January 29, 2024, and the impugned Order-in-Appeal was dated April 30, 2025. The Court's decision was based on the fact that the appellate authority had dismissed the appeal as barred by limitation under Section 73 of the Finance Act, 1994, and the petitioner sought to raise grounds before the CESTAT, including condonation of delay.

Key Issues

1. Whether the Order-in-Original No. 10512023-24-Adjn(ADC)-ST, dated January 29, 2024, passed by the Joint Commissioner of Central Tax for the financial years 2016-17 and 2017-18 (up to June 2017) under the Service Tax Act is barred by limitation under Section 73 of the Finance Act, 1994, and if the extended period of limitation under Sub-Section (1) of Section 73 is applicable. 2. Whether the Order-in-Appeal No. HYD-SVTAX-RRC-APP'l-013-2025-26, dated April 30, 2025, passed by the Commissioner of Customs and Central Tax, Appeals-I, rejecting the appeal on the ground of limitation without providing an opportunity of hearing, is arbitrary and violative of the principles of natural justice. Petitioner's arguments: The petitioner argued that the Order-in-Original was barred by limitation under Section 73 of the Finance Act, 1994, and that the extended period of limitation was not applicable. They also contended that the Order-in-Original was dispatched to their old address. Furthermore, the petitioner argued that the Order-in-Appeal was passed arbitrarily, violating principles of natural justice, as it rejected their appeal on limitation grounds without a hearing. They sought to raise all available grounds before the CESTAT and requested condonation of delay. Respondents' arguments: The learned Senior Standing Counsel for CBIC submitted that the petitioner should have approached the learned CESTAT even if its appeal was dismissed on the ground of delay.