Delay in Filing Service Tax Appeal Due to Tax Officer’s Failure to Reissue Login Credentials in Time: CESTAT Condones 26-Day Delay [Read Order]

The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the dismissal of an appeal as time-barred was not justified when the delay was caused by the tax officer’s inability to reissue login credentials in time, which prevented the appellant from filing the appeal within the prescribed period.

Car Clinic, the appellant, is registered with the service tax department for providing repair, conditioning, restoration, decoration, or other services for motor vehicles. Based on third-party data received from the Income Tax Department for the years 2015-16 to 2017-18, the department observed differences between the gross receipts shown in income tax data and those declared in service tax returns.

A show cause notice dated 24.12.2020 was issued for recovery of Rs. 4,39,226 in short-paid service tax along with interest and penalties. After adjudication, the department confirmed the demand under Section 73(1) of the Finance Act, 1994, and ordered recovery with interest under Section 75, and imposed penalties under Sections 77 and 78.

The order was received by the appellant on 22.10.2022. The appeal before the Commissioner (Appeals) was filed on 17.02.2023 and was rejected as time-barred under Section 85 of the Finance Act, 1994.

The appellant’s counsel argued that the appeal period ended on 22.12.2022, with a further condonable period up to 22.01.2023. They explained that on 28.12.2022, the appellant wrote to the Deputy Commissioner requesting reissue of login ID and password.

The tax officer failed to do so and due to these technical issues, the appellant was unable to file the appeal before the last permissible date. They argued that the delay was not on account of any fault of the appellant and the case should be decided on merits.

The revenue counsel supported the impugned order and maintained that the appeal was beyond even the condonable limit, justifying its dismissal.

The single-member bench comprising S. S. Garg (Judicial Member) observed that the delay in filing was indeed caused by the technical glitches and the tax officer’s failure to reissue the login credentials, which prevented the appellant from meeting the deadline of 22.01.2023. The tribunal found that such circumstances warranted condonation.

The tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) with a direction to decide the case on merits after granting the appellant an opportunity of hearing and to pass a reasoned order within two months from the receipt of the tribunal’s order. The appeal was allowed by way of remand.

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