M/S B.L Electricals vs. Union Of INDIA And 2 Ors

Facts

The petitioner, M/s B.L. Electricals, is aggrieved by an order dated 23.06.2020 passed by the Assistant Commissioner, Central Goods & Service Tax, Tezpur. This order held the petitioner liable to pay Service Tax of Rs. 47,98,842/-, an equal amount as penalty, and Rs. 5,000/- under Section 77 of the Finance Act, 1994. The petitioner claims to have executed works-contracts for Government Departments and that VAT was deducted from payments received, asserting no liability for Service Tax. A Show Cause Notice was issued on 19.07.2019, to which the petitioner replied on 20.12.2019, enclosing supporting documents. The petitioner failed to appear for a hearing scheduled for 24.02.2022 due to miscommunication, compounded by the COVID-19 pandemic and subsequent lockdown. The impugned order was then passed. The petitioner filed a writ petition challenging this order.

Held

The Court held that the writ petition is maintainable in view of the circumstances presented, particularly the impact of the COVID-19 pandemic and the Supreme Court's order extending the period of limitation. The Court noted that Section 85 of the Finance Act, 1994, provides for an appeal against orders passed under Sections 71, 72, and 73, with a statutory period of three months, extendable by six months if sufficient cause is shown. Crucially, the Apex Court's order dated 10.01.2022 in Miscellaneous Application No. 21/2022 extended the period of limitation for judicial and quasi-judicial proceedings from 15.03.2020 till 28.02.2022. The Court found that the petitioner may be entitled to the benefit of this extension. Therefore, the petitioner was permitted to approach the appellate authority to challenge the impugned order dated 23.06.2020. The appellate authority was directed to consider the petitioner's grievances, taking into account the Supreme Court's order and any subsequent notifications, and pass an appropriate order after providing a hearing. The impugned order was kept in abeyance until the appellate authority passes its order. The petitioner was directed to file the appeal within four weeks from the date of the order.

Key Issues

1. Whether the writ petition is maintainable before this Court, given the availability of an alternative statutory remedy of appeal under Section 85 of the Finance Act, 1994? The Revenue argued that the writ petition is not maintainable as the petitioner failed to avail the alternative remedy and did not approach the authorities to seek it. The Petitioner contended that due to the COVID-19 pandemic and the resulting lockdown, they were unable to avail the statutory alternative remedy and sought permission to file an appeal now. The Court also considered the implications of the Supreme Court's order extending the period of limitation for judicial and quasi-judicial proceedings.