Gauhati High Court
WP(C)/688/2025 on 4 March, 2025
Author: Manish Choudhury
Bench: Manish Choudhury
Page No.# 1/30
GAHC010022722025
2025:GAU-AS:2509
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : Writ Petition (Civil) 688/2025
1. International Engineering Construction, a partnership
firm having its Registered Office at Bonia Bari, P.O.
Sivasagar - 785640, Assam, represented by its Managing
Partner Sri Rafiqul Islam i.e. the petitioner no. 2.
2. Rafiqul Islam S/o Md. Tofazul Ali, resident of Boni
Bari, P.O. & P.S. & District - Sivasagar, Assam.
......Petitioners
-vs-
1. The Union of India, represented by the Secretary to
the Government of India, Ministry of Finance, Department
of Revenue, Room no. 66-A, North Block, New Delhi -
110001.
2. The Principal Commissioner of Central Goods and
Service Tax, GST Bhawan, Kedar Road, Machkhowa
Guwahati -781001.
3. The Commissioner [Appeals], CGST Central Excise
and Customs, 3rd Floor, GST Bhawan, Kedar Road,
Machkhowa Guwahati - 781001.
4. The Assistant Commissioner Central Goods and
Service Tax, Central Excise, Dibrugarh Division, C.R
Building, Dibrugarh - 786003.
.....Respondents
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Advocates :
Petitioners : Mr. R.S. Mishra, Advocate
Respondents : Mr. S.C. Keyal, Standing Counsel, CGST
Date of Hearing and Judgment & Order : 04.03.2025
BEFORE
HON'BLE MR. JUSTICE MANISH CHOUDHURY
JUDGMENT & ORDER [ORAL]
The petitioners invoking the extra-ordinary and discretionary jurisdiction
under Article 226 of the Constitution of India, has preferred the present writ
petition to assail an Order-in-Original no. C. No.
[15]/37/ST/ADJ/IECPL/ACD/2020-21 dated 21.03.2024 passed by the
Adjudicating Authority [the respondent no. 4] and an Order-in-Appeal no. F. No.
GAPPL/COM/STP/1214/2024-APPEAL-GUWAHATI/9378 dated 02.12.2024 passed
by the 1st Appellate Authority, that is, the Commissioner [Appeals], Central
Excise & Customs [the respondent no. 3] whereby the appeal preferred by the
petitioners has been dismissed, without going into the merits, on the ground
that the appeal is time-barred.
2. It is stated that the petitioner no. 1 is a partnership firm ['the petitioner
firm', for short] having its registered office at Sivasagar, District - Sivasagar. The
petitioner no. 2 is one of the partners in the petitioner firm and its managing
partner. The petitioner firm is engaged in the business of execution of various
contracts and trading of construction materials. For the purpose of carrying on
its business, the petitioner firm had got itself registered under Section 69 of the
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Finance Act, 1994 [now omitted by the Central Goods & Services Tax (CGST)
Act, 2017] read with Rule 4 of the Service Tax Rules, 1994 with Registration no.
AABFI7196NSD001.
3. The petitioners have stated that during the Financial Years : 2014-2015 to
2017-2018, the petitioner firm had executed contract-works awarded to it by
M/s Shyama Power India Limited and M/s Neccon Power & Infra Limited, as a
sub-contractor. The petitioners have contended that no service tax was collected
from the petitioner firm on the said account and the service tax liability was
borne and paid by the main contractors, that is, M/s Shyama Power India
Limited and M/s Neccon Power & Infra Limited and to that effect, certificates
have also been issued by the main contractors.
4. Subsequently, the petitioner firm was served with a Demand-cum-Show
Cause Notice dated 30.09.2020 by the respondent no. 4 as the empowered
officer under sub-section [1] of Section 73 of the Finance Act, 1994 ['the
Finance Act', for short] asking the petitioner firm to show cause to the Joint
Commissioner, Goods & Services Tax, Dibrugarh, Assam within thirty days from
the date of receipt of the notice, as to why :
[a] Service Tax of Rs. 3,60,991.00 [Rupees three lakhs sixty thousand nine hundred and
ninety one] only including Ed. Cess, S&HE Cess, Krishi Kalyan Cess and Swachh Bharat
Cess relating to the period 2014-15 [October - March] to Financial Year : 2017 - 2018
[April - June] should not be demanded and recovered from them under Section 73 [1] of
the Finance Act, 1994 read with Section 142 [8][a], CGST Act, 2017;
[b] Interest at the appropriate rate should not be charged and realized from them under
Section 75 of the Finance Act, 1994;
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[c] Penalty should not be imposed on them under Section 76 of the Finance Act, 1994 for
their failure to pay full Service Tax in contravention of Section 68 of the said Act read with
Rule 6 of the Service Tax Rules; and
[d] Penalty should not be imposed on them under Section 78 of the Finance Act, 1994 for
suppression of the fact of provision of afore-mentioned taxable services, in contravention
of the provisions of Finance Act, 1994 and the Rules made thereunder with intent to evade
payment of Service Tax.
5. By the Demand-cum-Show Cause Notice, the petitioner firm was further
asked to produce all the relevant documents at the time of showing cause upon
which it would intend to rely in support of its defence. The petitioner firm as
noticee, was asked to inform in writing whether it would desire to be heard in
person and/or through its authorized representative when the case would be
posted for hearing. It was further mentioned that if nothing was indicated in the
written reply, it would be presumed that no personal hearing was desired by the
noticee and the case would be decided on the basis of the materials available on
record.
6. In the Demand-cum-Show Cause Notice, the respondent no. 4 had
indicated that on scrutiny of various records viz. Form 26AS [Income Tax],
Audited Balance Sheets and ST-3 Returns, it was revealed that during the period
: Financial Year : 2014 - 2015 [October - March] to Financial Year : 2017-2018
[upto June, 2017], the assessee-noticee had provided taxable services to a
number of organizations and on the basis of the documents submitted, that is,
work orders / contract agreements issued by / executed with the aforesaid
service receivers, the classification of service provided was not readily
ascertainable. During investigation, it was found out that the assessee-noticee
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had not disclosed the gross amount received during the period in the prescribed
ST-3 Returns with an intention to deliberately suppress the information from the
Department in contravention of Section 67 read with Section 70 of the Finance
Act and the rules made thereunder. In the Demand-cum-Show Cause Notice, it
was further recorded that it appeared that the assessee-noticee in contravention
of Section 68 of the Finance Act had not discharged the full service tax against
the taxable amount received from the various service receivers and had
suppressed the material facts from the Department wilfully by not disclosing the
details regarding the gross amount received from various service recipients in
the prescribed ST-3 Returns during the period. It was further mentioned that
taxable services without discharging service tax liabilities was provided with
intention to evade payment of service tax and therefore, the extended period
under sub-section [1] of Section 73 of the Finance Act was invocable. As the
assessee-noticee was found to have violated the provisions of Sections 66, 66B,
67, 68 and 70 of the Finance Act read with Rules 6 and 7 of the Service Tax
Rules, 1994 ['the Service Tax Rules', for short] and had evaded payment of
service tax amounting to Rs. 3,60,991/- including Education Cess, S&HE Cess,
Krishi Kalyan Cess and Swachh Bharat Cess against the taxable services, the
Demand-cum-Show Cause Notice was served upon the assessee-noticee, that
is, the petitioner firm.
7. On receipt of the Demand-cum-Show Cause Notice dated 30.09.2020, the
petitioner firm-assessee ['the petitioner-assessee', for brevity] submitted its
written reply on 16.02.2022 stating its case as to why the grounds indicated in
the Demand-cum-Show Cause Notice were not tenable. The date of personal
hearing was scheduled on 13.10.2022. However, due to change of the
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Adjudicating Authority, the date of personal hearing was re-scheduled on
16.02.2024. On the date of personal hearing on 16.02.2024, the authorized
representative of the petitioner-assessee appeared and reiterated the
submissions already set forth in its written reply.
8. The respondent no. 4 as the Adjudicating Authority had observed that
there were suppression of material facts on the part of the petitioner-assessee
and had the Department not inspected into the matter, material facts would
have remained hidden as the petitioner-assessee had suppressed the facts with
intent to evade the payment of service tax. The Adjudicating Authority had held
that the issuance of Demand-cum-Show Cause Notice was right in proposing
demand and recovery of service tax [including cesses] to the extent of Rs.
3,39,015/- under Section 73[2]; along with appropriate interest under Section
75; and penalty under Section 78 of the Finance Act. Observing so, the
Adjudicating Authority had proceeded to pass the following order in the Order-
in-Original on 21.03.2024 :-
ORDER
1. I confirm Service Tax [including cesses] Rs. 3,39,015.00 [Rupees Three Lakh Thirty
Nine Thousand Seven Hundred and Fifteen only] under Section 73[2] of the Finance Act,
1994. I drop demand for payment of Rs. 21,976.00 [Rupees Twenty One Thousand Nine
Hundred and Seventy Six only].
2. I order payment of interest on confirmed amount of demand mentioned at sl. no [1],
under Section 75 of the Finance Act, 1994.
3. I impose penalty of Rs. 3,39,015.00 [Rupees Three Lakh Thirty Nine Thousand Seven
Hundred and Fifteen only] under Section 78 of the Finance Act, 1994. However, the
penalty will be reduced to 25% if service tax along with applicable interest and reduced
penalty is paid within 30 days of received of this order.
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I refrain from impose penalty under section 76 of the finance Act, 1994, as the penalty
under Section 78 of the said Act is already imposed.
9. The petitioners have stated that it received a copy of the Order-in-Original
dated 21.03.2024 on 01.04.2024. Aggrieved by the Order-in-Original dated
21.03.2024, the petitioners decided to prefer an appeal under Section 85 of the
Finance Act read with Section 35 of the Central Excise Act, 1944 before the
Commissioner of Central Excise [Appeals]. The petitioners have stated that it
had accordingly, preferred the appeal under Section 85 of the Finance Act in the
prescribed format, Form ST-4 by filing it before the Commissioner of Central
Excise [Appeals] on 01.07.2024 and the memo of appeal so presented was
received and acknowledged by the office of the Commissioner [Appeals] under
its seal and signature on 01.07.2024.
10. As the issue raised herein is not in respect of the grounds of appeal taken
by the petitioner-assessee in its memo of appeal, the grounds urged in the
memo of appeal are not necessary to be adverted to.
11. Subsequent to the filing of the appeal 01.07.2024, the petitioner-assessee
deposited an amount of Rs. 25,432/- on 23.09.2024 as pre-deposit towards
filing of the appeal. The Appellate Authority initially fixed the date of personal
hearing on 25.10.2024. The petitioners have stated that when the petitioner-
assessee sought an adjournment on 25.10.2024, the date of personal hearing
was re-fixed on 27.11.2024. It was on 26.11.2024, the petitioner-assessee
submitted an application for condonation of the period of delay, which had
occurred in presentation of the memo of appeal on 01.07.2024. On the same
date, that is, on 26.11.2024, the petitioner-assessee also made a prayer in
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writing for adjournment with a further prayer to fix the date of personal hearing
on another date. The petitioners also submitted a copy of the challan evidencing
deposit of Rs. 25,432/- on 23.09.2024 towards pre-deposit required in filing the
appeal on 26.11.2024.
12. The Appellate Authority in the above backdrop, had observed that on the
date of personal hearing scheduled on 27.11.2024, none appeared for hearing.
The Appellate Authority had also observed that on 25.10.2024, the appellant,
that is, the petitioner-assessee was granted an opportunity of personal hearing
but none turned up on that day also. The Appellate Authority did not record
anything about the application filed on 26.11.2024 by the petitioner-assessee
wherein a prayer for adjournment was made with the further prayer to fix
another date for personal hearing.
13. The Appellate Authority by relying upon the provisions contained in sub-
section [3A] of Section 85 of the Finance Act proceeded to hold that the appeal
was time-barred. Holding so, the Appellate Authority observed that the appeal
preferred by the appellant could not, therefore, be taken up and hence, rejected
it without going into the merits. The operative parts of the impugned Order-in-
Appeal dated 02.12.2024 passed by the Appellate Authority read as under :-
9. Discussion & findings:
9.1. I find that sub-section [3A] of Section 85 of the Finance Act, 1994 provides that :
‘[3A] An appeal shall be presented within two months from the date of receipt of
the decision or order of such Adjudicating Authority, made on and after the
Finance Bill, 2012 receives the assent of the President, relating to service tax,
interest or penalty under this Chapter.’
Page No.# 9/309.2. In the instant case, the Order-in-Original was issued 21.03.2024 and has been
claimed by the appellant to have been communicated on 01.04.2024. Accordingly, going
by the above-mentioned S. No. 3A of the Section 85, the period of two months in the
instant case would have expired on 31.05.2024 whereas the appeal has been filed on
01.07.2024. Even the one [1] month extension that the Commissioner [Appeals] can allow
for, expired on 30.06.2024. Nonetheless, opportunities for personal hearing were granted.
However, neither the appellant nor any authorized representative appeared for the same
despite being given multiple opportunities in this regard.
Order
10. In view of above, without going into merits, the appeal filed by the taxpayer cannot be
taken up as it is time barred and is thus rejected and disposed off.
14. Assailing the Order-in-Appeal dated 02.12.2024 as well as the Order-in-
Original dated 21.03.2024, the present writ petition has been preferred.
15. I have heard Mr. R.S. Mishra, learned counsel for the petitioners; and Mr.
S.C. Keyal, learned Standing Counsel, CGST for all the respondents.
16. Mr. Mishra, learned counsel for the petitioners has submitted that as per
sub-section [3A] of Section 85 of the Finance Act, an appeal against an Order-
in-Original is required to be presented within a period of two months from the
date of receipt of the decision or order of the Adjudicating Authority. The
proviso to sub-section [3A] of Section 85 has provided that the Commissioner of
Central Excise [Appeals] as Appellate Authority can, if he satisfied that the
appellant was prevented by sufficient cause, allow it to be presented within a
further period of one month. Mr. Mishra has submitted that the impugned
Order-in-Original dated 21.03.2024 was communicated to and received by the
petitioners on 01.04.2024. Ordinarily, the appeal was to be preferred within a
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period of two months from 01.04.2024, that is, on or before 01.06.2024. Since
the appeal can also be filed within an extended period of further one month
beyond normal period of limitation of two months, the appeal filed by the
petitioners on 01.07.2024 was well within the extended period of limitation.
Contending so, Mr. Mishra has submitted that the Appellate Authority had erred
in counting the normal period of limitation as well as the extended period of
limitation. He has further submitted that the petitioners had made the pre-
deposit on 23.09.2024 and submitted an application for condonation of delay on
26.11.2024, which were prior to giving consideration by the Appellate Authority
to the appeal, whether to entertain it. He has further drawn attention to the fact
that that the application for condonation was filed for condoning delay of 29
days as 29.06.2024 was a Saturday and 30.06.2024 was a Sunday, when the
office was closed. The next working day was 01.07.2024 and as the appeal was
filed on 01.07.2024, the appeal had to be treated as one filed within the
extended period of limitation in terms of Section 10 of the General Clauses Act,
1897. In support of his submissions, Mr. Mishra has placed reliance upon the
decisions of the Hon’ble Supreme Court of India in State of Himachal
Pradesh and another vs. Himachal Techno Engineers and another,
reported in [2010] 12 SCC 210; and State of Madhya Pradesh and
another vs. Pradeep Kumar and another, [2000] 7 SCC 372.
17. Au contraire, Mr. Keyal, learned Standing Counsel, CGST has supported
the findings of the Appellate Authority, recorded in the Order-in-Appeal dated
02.12.2024. He has submitted that since the period of limitation is to be
counted from 01.04.2024, the Appellate Authority has rightly observed that the
period of two months had expired on 31.05.2024. Therefore, the extended
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period of limitation had also expired on 30.06.2024. Since the petitioner-
assessee had filed its appeal only on 01.07.2024, the date of filing of the appeal
was clearly beyond the permissible period of limitation. When an appeal is
preferred beyond the normal period of limitation, the applicant is required to
show sufficient cause for the Appellate Authority to reach a satisfaction as to
whether the appeal preferred during the extended period of one month should
be entertained by condoning the period of delay and whether the appellant has
shown sufficient cause. As the Appellate Authority does not have any discretion
to condone any period beyond the extended period of limitation of three
months, as provided by the proviso to sub-section [3A] of Section 85 of the
Finance Act, the appeal of the petitioner-assessee has rightly been rejected as
time-barred. It has been contended that there is provision for preferring an
appeal for the petitioner-assessee against the Order-in-Appeal. But the
petitioner firm-assessee has preferred the writ petition, by-passing the option of
preferring a statutory appeal. In view of presence of statutory remedy of
appeal, the writ petition is not maintainable.
18. In reply, Mr. Mishra has referred to the decision of the Hon’ble Supreme
Court of India in M/s Godrej Sara Lee Limited vs. Excise and Taxation
Officer-cum-Assessing Authority and others, reported in [2023] 3 SCR
871, to contend that when a pure question of law is involved, a writ petition is
maintainable despite availability of the statutory remedy of appeal and in the
case in hand, there is no factual dispute and the issue is limited to legal point.
19. I have given due consideration to the submissions of the learned counsel
for the parties and have also considered the materials brought on record by the
parties through their pleadings and the decisions referred to.
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20. Sub-section [1] of Section 86 of the Finance Act has provided for appeals
to the Appellate Tribunal. It has inter-alia provided that an assessee aggrieved
by an order passed by a Commissioner of Central Excise [Appeals] under
Section 85 of the Finance Act, may appeal to the Appellate Tribunal against such
order within three months from the receipt of the order. The Order-in-Appeal
dated 02.12.2024 has also mentioned that an appeal against the Order-in-
Appeal would lie under Section 86 of the Finance Act to the Customs, Excise and
Service Tax Appellate Tribunal [CESTAT] at Kolkata within three months from the
date on which the order sought to be appeal against is communicated. It is,
thus, clear the petitioner-assessee had the remedy of preferring a statutory
appeal against the Order-in-Appeal dated 02.12.2024 under Section 86 of the
Finance Act before the CESTAT. Yet, the petitioner firm-assessee has preferred
the instant writ petition under Article 226 of the Constitution of India against the
Order-in-Original dated 02.12.2024 before this Court. From the case records, it
is noticed that the writ petition was filed on 05.02.2025, which is, otherwise,
within the limitation period of three months for preferring the statutory appeal
under Section 86 of the Finance Act against the Order-in-Appeal dated
02.12.2024.
21. Since an issue of maintainability of the writ petition has been raised on the
premise that there is a provision in place for preferring a statutory appeal, the
issue needs to be addressed first before proceeding further. In this connection,
the decision of the Hon’ble Supreme Court of India in M/s Godrej Sara Lee
Limited vs. Excise and Taxation Officer-cum-Assessing Authority and
others, reported in [2023] 3 SCR 871, can be appropriately referred to.
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22. The issues of maintainability and entertainability of a writ petition under
Article 226 of the Constitution of India, despite alternative remedy provided by
the relevant statutes, have come up for discussion in M/s Godrej Sara Lee
Limited [supra]. It has been observed that the power to issue prerogative
writs under Article 226 is plenary in nature. Any limitation on the exercise of
such power must be traceable in the Constitution of India. Article 226 does not,
in terms, impose any limitation or restraint on the exercise of power to issue
writs. It has been held that though the exercise of writ powers despite
availability of a remedy under the very statute which has been invoked and has
given rise to the action impugned in the writ petition, ought not to be made in a
routine manner, yet, the mere fact that the petitioner before the High Court, in a
given case, has not pursued the alternative remedy available to him/it cannot
mechanically be construed as a ground for its dismissal. The High Courts,
depending on the fact situation involved in each particular case, have a
discretion whether to entertain a writ petition or not. One of the self-imposed
restrictions on the exercise of power under Article 226 that has evolved through
judicial precedents is that the High Court should normally not entertain a writ
petition, where an effective and efficacious alternative remedy is available. At
the same time, it must be remembered that mere availability of an alternative
remedy of appeal or revision, which the party invoking the jurisdiction of the
High Court under Article 226 has not pursued, would not oust the jurisdiction of
the High Court and render a writ petition ‘not maintainable’. It has been held
that availability of an alternative remedy does not operate as an absolute bar to
the maintainability of a writ petition and that the rule, which requires a party
to pursue the alternative remedy provided by the statute, is a rule of policy,
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convenience and discretion rather than a rule of law. It has been observed that
there is a fine but real distinction between the two distinct concepts,
entertainability and maintainability of a writ petition and the same is not to
be lost sight of. The objection as to maintainability goes to the root of the
matter and if such objection is found to be of substance, the Court would be
rendered incapable of even receiving the lis for adjudication. On the other hand,
the question of entertainability is entirely within the realm of discretion of the
High Courts, writ remedy being discretionary. After making a survey of a
number of decisions, it has been observed that when the writ petition raises a
pure question of law and if investigation into facts is unnecessary, the High
Court can entertain a writ petition in its discretion even though the alternative
remedy is not availed of. It has been observed that where the controversy is a
purely legal one and it does not involve disputed questions of fact, but only
questions of law, then it should be decided by the High Court instead of
dismissing the writ petition on the ground of an alternative remedy being
available.
23. It is a settled proposition that the doctrine of merger would not be
applicable to a case where an appeal is dismissed on the ground of limitation,
without going into the merits. It has been held in Chandi Prasad vs. Jagdish
Prasad, [2004] 8 SCC 724, to the effect that when an appeal is dismissed on
the ground that delay in filing the same is not condoned, the doctrine of merger
shall not apply. The Hon’ble Supreme Court of India in Raja Mechanical
Company Private Limited vs. Commissioner of Central Excise, Delhi-
I, [2012] 12 SCC 613, after referring to the decision in Chandi Prasad
[supra], has held that if for any reason an appeal is dismissed on the ground of
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limitation and not on merits, that order would not merge with the order passed
by the appellate authority. The same position has been reiterated in the case of
Assistant Commissioner [CT] LTU, Kakinada and others vs. Glaxo
Smith Kline Consumer Health Care Limited, [2020] 19 SCC 681, by
holding that rejection of delay application by the appellate forum does not entail
in merger of the assessment order with that order. It is also a settled
proposition that if the delay is not statutorily condonable, the delay cannot be
condoned. In view of such settled proposition, the issue involved in this writ
petition, is in a narrow confinement.
24. In the Order-in-Original dated 21.03.2024, the Adjudicating Authority has
observed that any person deeming himself aggrieved by the Order-in-Original
may appeal against the order in Form ST-4 to the Commissioner, Central Goods
& Service Tax, Customs & Central Excise [Appeal], Guwahati within sixty days
from the date of communication subject to deposit of a Court fee of Rs. 2.00
only and payment of 7.5% of the duty demanded where duty or duty and
penalty are in dispute or penalty, are in dispute or penalty, where penalty alone
is in dispute. It is further mentioned that the appeal should be filed in form ST-4
and in accordance with the provisions of Rule 3 of the Central Excise [Appeals]
Rules, 2001. This period of sixty days of limitation from the date of
communication, as mentioned in the Order-in-Original dated 02.01.2020, is
found not in conformity with the statutory prescription contained in sub-section
[3A] of Section 85 of the Finance Act. As per sub-section [3A], an appeal shall
be presented within two months from the date of receipt of an order of the
Adjudicating Authority. The proviso to sub-section [3A] has provided that the
Commissioner of Central Excise [Appeals] may, if he is satisfied that the
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appellant was prevented by sufficient cause from presenting the appeal within
the aforesaid period of two months, allow it to be presented within a further
period of one month. When the prescription contained in sub-section [3A] of
Section 85 has provided for a period of two months, it is not open for the
Adjudicating Authority to mention that a statutory appeal could be preferred
within a period of sixty days from the date of communication. In legal
landscape, a period of sixty days may not, always, be equal to two months.
Similarly, a period of thirty days cannot, always, be treated equal to one month.
There cannot be any doubt that the statutory prescription contained in Section
85 of the Finance Act would prevail in any such situation.
25. It is discernible from the operative parts of the Order-in-Original dated
02.12.2024 itself, extracted above, that the factual premise within which the
issue is required to be decided is not in dispute. The Order-in-Original was
passed on 21.03.2024. The Order-in-Original dated 21.03.2024 was thereafter,
communicated to or received by the petitioner-assessee on 01.04.2024. The
appeal under Section 85 of the Finance Act was thereafter, filed on 01.07.2024
and it was also received and acknowledged on 01.07.2024. In the context of the
case, the dates, 01.04.2024 and 01.07.2024 are crucial ones.
26. There is one more aspect which needs a dilation. The appeal which was
filed on 01.07.2024, was decided on 02.12.2024 by the Order-in-Appeal. By
Section 83 of the Finance Act, 1994 [‘the Finance Act‘, for short], certain
provisions of the Central Excise Act, 1944 [‘the Central Excise Act‘, for short], as
in force from time to time, have been made applicable. The provision of Section
35F of the Central Excise Act is one such provision, which is made applicable to
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the Finance Act. As per Clause [i] of Section 35F of the Central Excise Act, the
Commissioner [Appeals] shall not entertain any appeal unless the appellant has
deposited seven and a half per cent of the duty, in case where duty or duty and
penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance
of a decision or an order passed by an Adjudicating Authority. On a combined
reading of the provisions of sub-section [3] of Section 85 of the Finance Act and
Section 35 of the Central Excise Act, it is quite evident that presentation of an
appeal before the Appellate Authority is distinct from entertaining an appeal,
preferred by the appellant, by the Appellate Authority. In sub-section [5] of
Section 85 of the Finance Act, it is laid down that in hearing on appeal and
making order under Section 85, the Commissioner of Central Excise [Appeal]
shall exercise the same powers and follow the same procedure as he excises
and follows in hearing the appeals and making orders under the Central Excise
Act. It, in essence, goes to indicate that the Commissioner [Appeals] would not
entertain an appeal unless the requisite pre-deposit is not made. No provision
from the Finance Act or from the Central Excise Act has been brought to the
notice of the Court, which has, in clear terms, said that the amount is to be
deposited on or before the filing of the appeal.
27. It has emerged that the requisite pre-deposit in terms of Clause [i] of
Section 35F of the Central Excise Act was made on 23.09.2024, which was a
pre-requisite for the Appellate Authority to entertain an appeal. It has been
explained in a catena of decisions that the expression, ‘entertain’ means to deal
with or admit to consideration. In Lakshmi Rattan Engineers Works Ltd.
vs. Assistant Commissioner, Sales Tax, Kanpur and another, AIR
1968 SC 488, the meaning of the expression, ‘entertain’ came up for
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consideration in the context of Section 9 of the Uttar Pradesh Sales Tax Act,
1948. In the said case, the memo of appeal was not accompanied by the
challan showing the deposit of admitted tax and the Appellate Authority
dismissed an appeal preferred by the appellant therein against an assessment
order on that ground. Section 9 of the Uttar Pradesh Sales Tax Act, 1948 had
provided that no appeal against an assessment shall be entertained unless it
was accompanied by satisfactory proof of the payment of the amount of tax
admitted by the appellant to be due. It has been observed to the effect that the
word ‘entertain’, according to dictionary also, means ‘admit to consideration’.
Explaining further, the Court has observed that the word, ‘entertain’ means the
first occasion on which the Court takes up the matter of consideration. The
meaning of the word, ‘entertain’ has also been considered in Hindusthan
Commercial Bank Ltd vs. Punnu Sahu [Dead] Through Legal
Representatives, [1971] 3 SCC 124; and Durga Hotel Complex vs.
Reserve Bank of India and others, [2007] 5 SCC 120. A distinction has
been carved out between ‘receive’ or ‘accept’ on one hand and ‘entertain’ on the
other hand. It has, thus, been held that the expression, ‘entertain’ means to
‘adjudicate upon’ or to ‘proceed to consider on merits’ and not ‘initiation of
proceeding’ alone. Going by the above exposition, it is evident that when the
Appellate Authority considered the appeal for entertainment, the pre-requisite
for entertaining the appeal with regard to pre-deposit was fulfilled.
28. The petitioner firm as the appellant did not file any application for
condonation of delay on 01.07.2024, when the memo of appeal against the
Order-in-Original was filed. A question, therefore, also arises whether a memo
of appeal, if it is filed beyond the period of limitation, without being
Page No.# 19/30
accompanied by any application for condonation of delay, ought to have been
dismissed in limine.
29. In this connection, the decision in Pradeep Kumar [supra] can be
referred to. As per Rule 3-A of Order 41, Code of Civil Procedure, when an
appeal is presented beyond the expiry of the period of limitation specified
therefor, it shall be accompanied by an application supported by affidavit setting
forth the facts on which the appellant relies to satisfy the court that he had
sufficient cause for not preferring the appeal within such period. The question
which arose therein was what would be the consequence if such an appeal, filed
beyond the period of limitation, was not companied by an application seeking
condonation of delay. The Hon’ble Supreme Court has observed that though
sub-rule [1] of Rule 3A has used the word ‘shall’ and it would indicate that the
requirement is peremptory in tone, but such peremptoriness would not foreclose
a chance for the appellant to rectify the mistakes either on his own or on being
pointed out by the Court. The word ‘shall’ in the context need be interpreted as
an obligation cast on the appellant and the rule should not be interpreted very
harshly and make its non-compliance punitive to an appellant. The Hon’ble
Supreme Court has proceeded to observe as follows :-
11. No doubt sub-rule [1] of Rule 3-A has used the word ‘shall’. It was contended that
employment of the word ‘shall’ would clearly indicate that the requirement is peremptory in
tone. But such peremptoriness does not foreclose a chance for the appellant to rectify the
mistake, either on his own or being pointed out by the court. The word ‘shall’ in the context
need be interpreted as an obligation cast on the appellant. Why should a more restrictive
interpretation be placed on the sub-rule? The Rule cannot be interpreted very harshly and
make the non-compliance punitive to an appellant. It can happen that due to some
Page No.# 20/30mistake or lapse an appellant may omit to file the application [explaining the delay] along
with the appeal.
12. It is true that the pristine maxim vigilantibus non dormientibus jura subveniunt [law
assists those who are vigilant and not those who sleep over their rights]. But even a
vigilant litigant is prone to commit mistakes. As the aphorism ‘to err is human’ is more a
practical notion of human behaviour than an abstract philosophy, the unintentional lapse
on the part of a litigant should not normally cause the doors of the judicature permanently
closed before him. The effort of the court should not be one of finding means to pull down
the shutters of adjudicatory jurisdiction before a party who seeks justice, on account of
any mistake committed by him, but to see whether it is possible to entertain his grievance
if it is genuine.
* * * *
19. The object of enacting Rule 3-A in Order 41 of the Code seems to be twofold. First is,
to inform the appellant himself who filed a time-barred appeal that it would not be
entertained unless it is accompanied by an application explaining the delay. Second is, to
communicate to the respondent a message that it may not be necessary for him to get
ready to meet the grounds taken up in the memorandum of appeal because the court has
to deal with application for condonation of delay as a condition precedent. Barring the
above objects, we cannot find out from the Rule that it is intended to operate as
unremediably or irredeemably fatal against the appellant if the memorandum is not
accompanied by any such application at the first instance. In our view, the deficiency is a
curable defect, and if the required application is filed subsequently the appeal can be
treated as presented in accordance with the requirement contained in Rule 3-A Order 41
of the Code.
30. In the case in hand, the application for condonation of delay was filed on
26.11.2024 whereas the appeal came to be considered and disposed of by the
Page No.# 21/30
Appellate Authority on 02.12.2024. Thus, non-filing of the application for
condonation of delay at the time of filing of the appeal on 01.07.2024, which is
a curable defect, stood cured on 26.11.2024. Thus, when the Appellate
Authority gave consideration to the appeal on 02.12.2024, the defect of non-
filing of the application for condonation of delay was not in existence.
31. There is no dispute to the fact that the Appellate Authority had accepted
the position that the appeal was preferred by the petitioners on 01.07.2024 and
as such, normal period of limitation of two months and thereafter, the extended
period of one month are to be counted from 01.07.2024. But, the Appellate
Authority had reached a finding that the normal period of limitation of two
months would expire on 31.05.2024 and the extended period of limitation would
expire on 30.06.2024. Therefore, the only issue which has fallen for
consideration is whether the above view of the Appellate Authority is the correct
view. The earlier discussion coupled with the only issue leaves no doubt that
there is no involvement of disputed questions of fact and the issue involved is
only a legal one.
32. The Constitution Bench of the Hon’ble Supreme Court of India in
Commissioner of Customs [Import], Mumbai vs. Dilip Kumar and
Company and others, reported in [2018] 9 SCC 1, has observed that an Act
of Parliament/Legislature cannot foresee all types of situations and all types of
consequences. It is for the Court to see whether a particular case falls within
the broad principles of law enacted by the Legislature. It has been observed
that there are many occasions where the language used and the phrases
employed in the statute are not perfect. In all the Acts and Regulations, made
Page No.# 22/30
either by the Parliament or the Legislature, the words and phrases as defined in
the General Clauses Act and the principles of interpretation laid down in the
General Clauses Act are to be necessarily kept in view. If while interpreting a
statutory law, any doubt arises as to the meaning to be assigned to a word or a
phrase or a clause used in an enactment and such word, phrase or clause is not
specifically defined, it is legitimate and indeed mandatory to fall back on the
General Clauses Act. When there is repugnancy or conflict as to the subject or
context between the General Clauses Act and a statutory provision which falls
for interpretation, the Court must necessary refer to the provisions of the
statute. This Court is of the considered view that in the absence of any specific
provision in the Finance Act and the Central Excise Act regarding calculation of
time, the provisions of the General Clauses Act, 1897 are clearly referrable and
applicable to the case in hand.
33. Section 2 [35] of the General Clauses Act, 1897 [‘the General Clauses Act‘,
for short] has defined ‘month’ as a month reckoned according to the British
calendar. Thus, it is clear that a month does not refer to a period of thirty days,
but it refers to the actual period of a calendar month.
34. The meaning of ‘month’, as per sub-section 2 [35] of the General Clauses
Act, has come up for consideration in the case of State of Himachal Pradesh
and another vs. Himachal Techno Engineers and another, reported in
[2010] 12 SCC 210, in the context of the provision contained in Section 34 [3]
and the proviso thereto on the Arbitration and Conciliation Act, 1996. The said
provision has mentioned about three months limitation period and further thirty
days period within which a challenge to an arbitration award is to be filed in
Page No.# 23/30
Court. In that context, the Hon’ble Supreme Court has observed as under :-
14. The High Court has held that ‘three months’ mentioned in Section 34 [3] of the Act
refers to a period of 90 days. This is erroneous. A ‘month’ does not refer to a period of
thirty days, but refers to the actual period of a calendar month. If the month is April, June,
September or November, the period of the month will be thirty days. If the month is
January, March, May, July, August, October or December, the period of the month will be
thirty-one days. If the month is February, the period will be twenty-nine days or twenty-
eight days depending upon whether it is a leap year or not.
15. Sub-section [3] of Section 34 of the Act and the proviso thereto significantly, do not
express the periods of time mentioned therein in the same units. Sub-section [3] uses the
words ‘three months’ while prescribing the period of limitation and the proviso uses the
words ‘thirty days’ while referring to the outside limit of condonable delay. The legislature
had the choice of describing the periods of time in the same units, that is, to describe the
periods as ‘three months’ and ‘one month’ respectively or by describing the periods as
‘ninety days’ and ‘thirty days’ respectively. It did not do so. Therefore, the legislature did
not intend that the period of three months used in sub-section [3] to be equated to 90
days, nor intended that the period of thirty days to be taken as one month.
16. Section 3 [35] of the General Clauses Act, 1897 defines a ‘month’ as meaning a month
reckoned according to the British calendar.
17. In Dodds vs. Walker [1981] 1 WLR 1027, the House of Lords held that in calculating
the period of a month or a specified number of months that had elapsed after the
occurrence of a specified event, such as the giving of a notice, the general rule is that the
period ends on the corresponding date in the appropriate subsequent month irrespective
of whether some months are longer than others. To the same effect is the decision of this
Court in Bibi Salma Khatoon vs. State of Bihar, [2001] 7 SCC 197.
Page No.# 24/30
18. Therefore when the period prescribed is three months [as contrasted from 90 days]
from a specified date, the said period would expire in the third month on the date
corresponding to the date upon which the period starts. As a result, depending upon the
months, it may mean 90 days or 91 days or 92 days or 89 days.
35. Noticeably in sub-section [1], sub-section [3A] and proviso to sub-section
[3A] of Section 85 of the Finance Act, the same unit of time, ‘month’ is used and
there is no mention of days.
36. The provisions of Section 9 of the General Clauses Act have contained the
manner for calculation of time. Section 9 of the General Clauses Act has
provided for commencement and termination of time. For ready reference,
Section 9 is quoted hereinbelow :-
9. Commencement and termination of time.–
[1] In any Central Act or Regulation made after the commencement of this Act, it shall be
sufficient, for the purpose of excluding the first in a series of days or any other period of
time, to use the word ‘from’, and, for the purpose of including the last in a series of days or
any other period of time, to use the word ‘to’.
[2] This section applies also to all Central Acts made after the third day of January, 1868,
and to all Regulations made on or after the fourteenth day of January, 1887.
37. From a reading of Section 9, quoted above, it is noticeable that in respect
of any Central Act or Regulation, it shall be sufficient, for the purpose of
excluding the first in a series of days or any other period of time, to use the
word ‘from’, and for the purpose of including the last in a series of days or any
other period of time, to use the word ‘to’. From plain and simple language of
Page No.# 25/30
Section 9, it is discernible that if particular time-period is given from a certain
date within which an act is to be done, the day on that date is to be excluded
and meaning thereby, the period is to be calculated by excluding the day from
which the period is to be reckoned. The provisions of sub-section [2] of Section
9 of the General Clauses Act has made it evidently clear that Section 9 applies
to all Central Acts made after the third day of January, 1868, meaning thereby,
Section 9 is applicable to the Finance Act and the Central Excise Act. The
provisions of Section 9 of the General Clauses Act have come to be considered
in a number of decisions of Hon’ble Supreme Court of India.
38. In Tarun Prasad Chatterjee vs. Dinanath Sharma, reported in
[2000] 8 SCC 649, the Hon’ble Supreme Court for the purpose of interpreting
the provision of Section 9 of the General Clauses Act, has quoted the following
from Halsbury’s laws of England, 37th Edition, Volume 3, Page 92 : –
Days included or excluded –
When a period of time running from a given day or even to another day or event is
prescribed by law or fixed as contract, and the question arises whether the computation is
to be made inclusively or exclusively of the first-mentioned or of the last-mentioned day,
regard must be had to the context and to the purposes for which the computation has to
be made. Where there is room for doubt, the enactment or instrument ought to be so
construed as to effectuate and not to defeat the intention of Parliament or of the parties, as
the case may be. Expressions such as ‘from such a day’ or ‘until such a day’ are
equivocal, since they do not make it clear whether the inclusion or the exclusion of the day
named may be intended. As a general rule, however, the effect of defining a period in such
a manner is to exclude the first day and to include the last day.
Page No.# 26/30
38.1. As regards Section 9 of the General Clauses Act, 1897, the decision
in Tarun Prasad Chatterjee vs. Dinanath Sharma [supra] has observed
as under :
12. Section 9 says that in any Central Act or Regulation made after the commencement 0f
of the General Clauses Act, 1897, it shall be sufficient for the purpose of excluding the first
in a series of days or any other period of time, to use the word ‘from’, and, for the purpose
of including the last in a series of days or any period of time, to use the word ‘to’. The
principle is that when a period is delimited by statute or rule, which has both a beginning
and an end and the word ‘from’ is used indicating the beginning, the opening day is to be
excluded and if the last day is to be included the word ‘to’ is to be used. In order to exclude
the first day of the period, the crucial thing to be noted is whether the period of limitation is
delimited by a series of days or by any fixed period. This is intended to obviate the
difficulties or inconvenience that may be caused to some parties. For instance, if a policyof insurance has to be good for one day from 1 st January, it might be valid only for a few
hours after its execution and the party or the beneficiary in the insurance policy would notget reasonable time to lay claim, unless 1st January is excluded from the period of
computation.
13. It was argued that the language used in Section 81[1] that ‘within forty-five days from,
but not earlier than the date of election of the returned candidate’ expresses a different
intention and Section 9 of the General Clauses Act has no application. We do not find any
force in this contention. In order to apply Section 9, the first condition to be fulfilled is
whether a prescribed period is fixed ‘from’ a particular point. When the period is marked by
terminus a quo and terminus ad quem, the canon of interpretation envisaged in Section 9
of the General Clauses Act, 1897 require to exclude the first day. The words ‘from’ and
‘within’ used in Section 81[1] of the RP Act, 1951 do not express any contrary intention.
39. As per Clause [b] of Section 142 of the Negotiable Instruments [NI] Act,
Page No.# 27/30
1881, as amended, a complaint for the offence under Section 138 of the Act is
to be made ‘within’ one month from the date on which the cause of action
arises under clause [c] of the proviso to Section 138. The said provision has
come for consideration before a 3-Judges Bench of the Hon’ble Supreme Court
of India in Econ Antri Limited vs. Rom Industries Limited and
another, reported in [2014] 11 SCC 769. Approving the decision in Tarun
Prasad Chatterjee vs. Dinanath Sharma [supra] and interpreting Section
9, it has been held that while calculating the period of one month, which is
provided under Section 142[b] of the Negotiable Instruments [NI] Act, 1881,
the period has to be reckoned by excluding the date on which the cause of
action arises. In the proviso [c] to Section 138 of the NI Act, it has been
stipulated that if the drawer of the dishonoured cheque fails to make payment
of the amount of the dishonoured cheque to the payee or, as the case may be,
to the holder in the due course of the cheque ‘ within’ fifteen days of the receipt
‘of ‘ the demand notice, the cause of action to file the complaint under Section
142[b] of the NI Act arises ‘within’ one month ‘of ‘ the date on which the cause
of action arises. In Econ Antri Limited [supra], it has been held that it is not
possible to hold that the word ‘ of ‘ occurring in the proviso [c] of Section 138
and Section 142[b] of the Negotiable Instruments [NI] Act is to be interpreted
differently as against the word ‘from’ occurring in Section 138[a] of the said Act;
and that for the purposes of Section 142[b], which prescribes to the effect that
the complaint is to be filed ‘ within’ thirty days ‘of ‘ the date on which the cause
of action arises, the starting date on which the cause of action arises should be
included for computing the period of thirty days. It has been further held that
the words ‘of ‘, ‘from’ and ‘after’ may, in a given case, mean really the same
thing. Quoting from Stroud’s Judicial Dictionary, it has been observed that the
Page No.# 28/30
word ‘of ‘ is sometimes equivalent of ‘after’.
40. In Saketh India Ltd. and another vs. India Securities Ltd.,
reported in [1999] 3 SCC 1, it has been held that in computing a period of one
month as limitation period, the date of cause of action is to be excluded as per
the provisions contained in Section 9 of the General Clauses Act. It has been
cited as an example to the effect that if the cause of action arises on
15.10.1995, in computing the one month limitation period, the date 15.10.1995
is held to be excluded and the period of limitation of one month would be
complete on 15.11.1995.
41. The date, 01.04.2024 is a crucial one as it was on that day the Order-in-
Original dated 21.03.2024 was communicated or received by the petitioner-
assessee giving rise to the cause of action to prefer an appeal within normal
period of limitation of two months and within extended period of limitation of
further one month. In view of Section 9 of the General Clauses Act, the day,
‘01.04.2024’ is to be excluded while calculating the period of two months plus
one month. Therefore, the period of two months plus one month has to be
reckoned by excluding the date, 01.04.2024. Following the exposition how a
‘month’ is to be calculated following the provision of Section 2 [35] of the
General Clauses Act, the two month of period would have expired on
01.06.2024 and the three month period of limitation [=two months (ordinary
period of limitation) + one month (extended period of limitation)] would have
expired on 01.07.2024. Thus, it is not in doubt that the date of filing of the
appeal by the petitioner-assessee on 01.07.2024 is within extended period of
limitation of one month beyond the normal period of limitation of two months
Page No.# 29/30
under sub-section [3A] of Section 85 of the Finance Act. The Appellate Authority
could not have held that the period of two months from 01.04.2024 expired on
31.05.2024 and the extended period of one month expired on 30.06.2024.
42. For the discussion made and the reasons assigned, this Court is of the
view that the impugned Order-in-Appeal dated 02.12.2024 is not sustainable in
law and is liable to be set aside. It is accordingly ordered.
43. As by the impugned Order-in-Appeal dated 02.12.2024, the Appellate
Authority rejected the appeal presented by the petitioner-assessee as time-
barred without going into the merits and without discussing the grounds taken
by the petitioner-assessee in the memo of appeal and the causes shown by the
petitioner-assessee in its application for condonation of delay and such kind of
order does not result in merger, as explained earlier, the Appellate Authority
shall now proceed to consider the application filed by the petitioner-assessee for
condonation of delay in terms of the proviso to sub-section [3A] of Section 85 of
the Finance Act, on its merit. If the Appellate Authority on consideration of the
application for condonation of delay filed by the petitioner-assessee as the
appellant reaches a satisfaction that the petitioner-assessee was prevented by
sufficient cause from presenting the appeal in time, then the Appellate Authority
after condoning the period of delay, shall proceed to hear the appeal filed by the
petitioner-assessee on its own merits. It is made clear that this Court has not
made any observation as regards causes shown by the petitioner-assessee in its
application seeking condonation of delay as well as in the memo of appeal
preferred against the Order-in-Original dated 21.03.2024. The Appellate
Authority shall, therefore, have to consider the same on merits.
Page No.# 30/30
44. The writ petition stands allowed to the extent indicated above. There shall,
however, be no order as to cost.
JUDGE
Comparing Assistant
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