M/S Mysore Hotel Complex vs. Union Of INDIA

Held

The High Court held that the delay of 64 days (as calculated by the Court, contrasting with the Appellate Authority's 124 days) in preferring the appeal before the Commissioner (Appeals) should be construed as a sufficient cause and deserves to be condoned. While acknowledging the statutory limitation on the Appellate Authority's power to condone delay beyond 30 days, the Court found no prohibition for itself under Articles 226 and 227 of the Constitution in exercising extraordinary jurisdiction to condone the delay. The Court reasoned that accepting the petitioner's explanation and condoning the delay, subject to costs, would prevent a failure of justice, especially considering the merits found in the appeal. The Court condoned the delay and restored the appeal to the file of the Commissioner (Appeals) with a direction to decide it on merits within three months, subject to the petitioner depositing Rs. 10,000/- as costs. All rights and contentions of the parties were left open. The issue of the adjudication order's merits was expressly left undecided.

Facts

The petitioner, M/s Mysore Hotel Complex, a partnership firm engaged in renting commercial property, challenged an order by the Commissioner (Appeals) dated September 17, 2018, which rejected their appeal as time-barred. The original adjudication order was passed by the Assistant Commissioner of Central Tax on November 30, 2017/December 11, 2017, and served on the petitioner on January 21, 2018. The petitioner filed their appeal before the Commissioner (Appeals) on May 25, 2018, which was 124 days beyond the statutory period. The petitioner contended that the delay was due to an accident met by their partner. The Commissioner (Appeals) rejected the appeal, citing the statutory limitation under the first proviso to Section 35(1) of the Finance Act, 1994, which allowed for condonation of delay only up to 30 days.

Key Issues

1. Whether the delay of 124 days in filing the appeal before the Commissioner (Appeals) can be condoned, considering the petitioner's explanation of an accident and the statutory limitation under the first proviso to Section 35(1) of the Finance Act, 1994. Petitioner's arguments: The petitioner argued that the delay was caused by a genuine reason, namely, an accident suffered by their partner, which prevented timely filing. They contended that the Commissioner (Appeals) erred in not condoning the delay, despite the existence of sufficient cause. They relied on the Division Bench ruling in Phoenix Plasts Co. vs. Commissioner of C. Ex. (Appeal – I), Bangalore, which allowed interference under Article 226 of the Constitution in cases of failure of justice, even with delay, subject to conditions like deposit and costs. They also stated that pre-deposit conditions were complied with. Revenue's arguments: The judgment records no specific arguments from the respondents (Union of India and tax authorities) regarding the condonation of delay or the merits of the case. The Commissioner (Appeals)'s order, which rejected the appeal as time-barred, reflects the revenue's stance.