Chandan Deka vs The Union Of India And 4 Ors.
- Court
- Gauhati High Court
Page No. 1/15
GAHC010067802026
2026:GAU-AS:7258
THE GAUHATI HIGH COURT
[THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH]
W.P.[C] No. 2081/2026
Chandan Deka, Son of Late Uttam
Chandra Deka, Resident of House No. 14,
Amrit Nagar, Basistha Chariali, P.O.
Beltola, P.S. Basistha Chariali, Kamrup
[M], Guwahati, Assam – 781028.
………………Petitioner
- VERSUS -
1. The Union of India, Represented by the
Secretary of Government of India, Ministry
of Finance, Department of Revenue, Room
No. 66, North Block, New Delhi - 110001.
2. The Principal Commissioner of Central
Goods and Service Tax, Guwahati, GST
Bhawan, Kedar Road, Machkhowa,
Guwahati – 781001.
3. The Commissioner [Appeals], CGST,
rd
Central Excise and Customs, 3 Floor, GST
Page No. 2/15
Bhawan, Kedar Road, Machkhowa,
Guwahati - 781001.
4. The Deputy Commissioner, CGST
Commissionerate, Guwahati, Anti-Evasion
st
Unit-II, Room No. 103, 1 Floor, GST
Bhawan, Kedar Road, Machkhowa,
Guwahati – 781001.
………………. Respondents
BEFoRE
HoN’BLE MR. JUSTICE MANISH CHoUDHURY
Advocates :
For the Petitioner : Mr. R.S. Mishra, Advocate
For the Respondent nos. 1 – 4 : Mr. S.C., Special Counsel, & Special
Counsel, CGST
Date on which judgment is reserved : Not Applicable
Date of pronouncement of judgment : 20.05.2026
Whether the pronouncement is of the
Operative part of the judgment ? : No
Whether the full judgment has been
Pronounced ? : Yes
Page No. 3/15
JUDGMENT & oRDER
1. Heard Mr. R.S. Mishra, learned counsel for the petitioner and Mr. S.C. Keyal,
learned Senior Counsel & Special Counsel, Central Goods and Services Tax
[CGST] for all the respondents.
2. The writ petition, instituted under Article 226 of the Constitution of India, has
been preferred to assail an Order dated 03.08.2023 passed by the
Commissioner [Appeals], CGST, Central Excise & Customs, Guwahati [‘the
Appellate Authority, for short]. By the Order, the Appellate Authority had
dismissed the appeal preferred by the petitioner under sub-section [3A] of
Section 85 of the Finance Act, 1994 on the ground that presentation of the
appeal was beyond time.
3. The background facts, shorn of unnecessary details, leading to the
presentation of the appeal require an exposition first.
4. The petitioner has stated that he is in the business of providing works
contract services under the aegis of his proprietorship concern, M/s Chandan
Deka, which has its Principal Place of Business at Guwahati, District – Kamrup
[Metro]. The petitioner has stated that during the Financial Year : 2014-2015,
the petitioner was engaged in providing works contract services to several
Government departments like Irrigation Department, Government of Assam;
Assam Integrated Flood & River Bank Risk Management Agency; North-East
Frontier Railway; etc. It is the contention of the petitioner that the said
authorities fall outside the purview of Service Tax regime in terms of Mega
Exemption Notification no. 25/2012-ST dated 20.06.2012, as amended, vide
S. no. 12A of Notification no. 09/2016 dated 01.03.2016.
5. On 05.11.2019, the petitioner was served with a Demand-cum-Show Cause
Notice on the grounds of contravention of provisions of Sections 66B, 68, 69
Page No. 4/15
and 70 of the Finance Act, 1994 read with Rules 4, 6 and 7 of the Service Tax
Rules, 1994 inasmuch as the petitioner provided taxable services without
taking Service Tax Registration and without payment of Service Tax during
the Financial Year : 2014-2015 amounting to Rs. 42,36,212/- [including
cesses]. By the Demand-cum-Show Cause Notice, the petitioner was called
upon to show cause as to why the Service Tax amount of Rs. 42,36,212/-
shall not be recovered from him for services rendered during the Financial
Year : 2014-2015 by invoking the extended period as per the proviso to sub-
section [1] of Section 73 of the Finance Act, 1994, as amended [hereinafter
referred to as ‘the Finance Act’, for short], along with interest, penalty, etc.
Admittedly, the petitioner did not submit any Reply to the said Demand-cum-
Show Cause Notice dated 05.11.2019.
6. By an Order-in-Original dated 16.03.2022, the jurisdictional Central Excise
Officer [the respondent no. 4] confirmed the demand of Service Tax
amounting to Rs. 42,36,212/- including Education Cess and Secondary &
Higher Education Cess for the period from 01.04.2014 to 31.03.2015 in terms
of Section 73[2] of the Finance Act. The jurisdictional Central Excise Officer
had also ordered for payment of interest on the confirmed amount at
applicable rates along with penalties of Rs. 10,000/- each under Section 77[1]
and Section 77[2] respectively of the Finance Act for violation of Section 69
and Section 70. In addition, a penalty of Rs. 42,36,212/- had also been
imposed in terms of Section 78 of the Finance Act. The noticee, that is, the
petitioner was also given an option to pay reduced penalty equivalent to 25%
of the amount of penalty imposed under Section 78, subject to the condition
that the noticee would deposit the amount of Service Tax and cess[s]
confirmed under Section 73[2] of the Finance Act, along with interest in terms
of Section 75 and the entire amount of penalty as imposed under Section
77[1] and Section 77[2] as well as reduced penalty imposed under the
proviso to Section 78 of the Finance Act, within a period of thirty days from
the date of receipt of the Order-in-Original. As per the Order-in-Original, in
Page No. 5/15
response to the Demand-cum-Show Cause Notice and a subsequent
Reminder dated 08.07.2021, the petitioner-noticee did not submit any Reply
or make any correspondence in that connection. Dates of personal hearing
were fixed on 01.03.2022, 02.03.2022 and 04.03.2022 but the noticee did not
appear for personal hearing also on any of the three dates as fixed.
7. The Order-in-Original dated 16.03.2022 was directed to be served or
communicated to the petitioner by an endorsement of the Assistant
Commissioner [A&E] on 16.03.2022. The petitioner instead of paying the
reduced penalty in terms of the Order-in-Original dated 16.03.2022, had
opted to present an appeal under sub-section [3A] of Section 85 of the
Finance Act.
8. Section 85 of the Finance Act which is contained in Chapter V of the Finance
Act, has provided for appeals as under :-
85. Appeals to the Commissioner of Central Excise [Appeals] . –
[1] Any person aggrieved by any decision or order passed by an
adjudicating authority subordinate to the Principal Commissioner of
Central Excise may appeal to the Commissioner of Central Excise
[Appeals].
[2] Every appeal shall be in the prescribed form and shall be verified
in the prescribed manner.
[3] An appeal shall be presented within three months from the date of
receipt of the decision or order of such adjudicating authority, relating
to service tax, interest or penalty under this Chapter, made before the
date on which the Finance Bill, 2012 receives the assent of the
President :
Page No. 6/15
Provided that the Commissioner of Central Excise [Appeals may, if he
is satisfied that the appellant was prevented by sufficient cause from
presenting the appeal within the aforesaid period of three months,
allow it to be presented within a further period of three months.
[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 :
Provided that the Commissioner of Central Excise [Appeals] may, if he
is satisfied that the 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 .
[4] The Commissioner of Central Excise [Appeals] shall hear and
determine the appeal and, subject to the provisions of this Chapter,
pass such orders as he thinks fit and such orders may include an
order enhancing the service tax, interest or penalty :
Provided that an order enhancing the service tax, interest or penalty
shall not be made unless the person affected thereby has been given
a reasonable opportunity of showing cause against such
enhancement.
[5] Subject to the provisions of this Chapter, in hearing the appeals
and making orders under this Section, the Commissioner of Central
Excise [Appeals] shall exercise the same powers and follow the same
procedure as he exercises and follows in hearing the appeals and
making orders under the Central Excise Act, 1944] [1 of 1944].
[emphasis supplied in bold]
Page No. 7/15
9. It is the case of the petitioner that he presented the appeal in Form ST-4, as
stipulated by Rule 8 of the Service Tax Rules, 1994, before the Appellate
Authority in proper form on 20.06.2022 and the office of the Appellate
Authority acknowledged the presentation of the appeal of the petitioner under
its signature and seal on 20.06.2022.
10. The Appellate Authority has adverted to the events in detail before holding
that presentation of the appeal preferred against the Order-in-Original dated
16.03.2022 preferred by the petitioner was beyond time. As the dismissal of
an appeal against an Order-in-Original by the Appellate Authority on the
ground of delay did not result in merger of the Order-in-Original with the
Order dated 03.08.2023 whereby the appeal was dismissed on the ground of
delay, the facts delineated in detail in the Order dated 03.08.2023 by the
Appellate Authority are not required to be reiterated herein, except the
relevant details.
11. In the Order dated 03.08.2023, the Appellate Authority had recorded that the
appeal was filed on 20.06.2022. By referring to the provisions contained in
sub-section [3A] of Section 85 of the Finance Act, the Appellate Authority had
recorded that the appeal presentation by the petitioner was beyond the
aggregate period of three months as it was after expiration of the normal
period of limitation of two months and the extended period of limitation of
one month thereafter, subject to showing sufficient cause. The Appellate
Authority had recorded that the normal period of limitation of two months for
presenting the appeal against the Order-in-Original dated 16.03.2022 expired
on 16.05.2022 and the extended period of limitation of one month thereafter
expired on 15.06.2022. Therefore, the appeal filed by the petitioner on
20.06.2022 was beyond time.
12. Sub-section [3A] of Section 85 has prescribed that an appeal shall be
presented within two months from the date of receipt of the decision or order
Page No. 8/15
of the Adjudicating Authority. If the date of decision or order of the
Adjudicating Authority and the date of receipt of the decision or order of the
Adjudicating Authority are same, the period of two months for the normal
period of limitation of two months and thereafter, the period of one month for
the extended period are to be counted from the date of such receipt. But if
the date of the decision or order is different from the date of receipt of the
decision or order, the period of limitation for presentation of the appeal is to
be counted from the date of such receipt.
13. The learned Senior Counsel and Special Counsel, CGST, based on records
available at the end of the Department, has submitted that the Order-in-
Original was sent to the address of the petitioner by registered post on
24.03.2022. In support, he has placed the relevant page of the postal
despatch register, which reflects that the copy of the Order-in-Original was
sent for communication to the petitioner on 24.03.2022 by registered post.
He has submitted that the Department does not have any record as regards
the date of delivery. The petitioner has contended that the copy of the Order-
in-Original dated 16.03.2022 was received by him on 21.04.2022. As it is a
fact that the copy of the Order-in-Original dated 16.03.2022 was sent for
communication to the petitioner on 24.03.2022, then, by no stretch, the copy
of the said Order-in-Original could not have been received by the petitioner
on any date earlier to 24.03.2022. If it is taken as an extreme case, for the
sake of argument, that the petitioner had received the copy of the Order-in-
Original on 24.03.2022 itself, then the period of limitation is to be counted by
taking the date of communication, 24.03.2022 as the date of cause of action
for presentation of the appeal.
14. For the purpose of the instant case, the provision of sub-section [1] of
Section 37C is of relevance and the same is quoted hereinbelow :-
Page No. 9/15
[1] Any decision or order passed or any summons or notices issued
under this Act or the rules made thereunder, shall be served,—
[a] by tendering the decision, order, summons or notice, or
sending it by registered post with acknowledgment due or by
speed post with proof of delivery or by courier approved by
the Central Board of Excise and Customs constituted under
the Central Boards of Revenue Act, 1963, to the person for
whom it is intended or his authorized agent, if any;
[b] if the decision, order, summons or notice cannot be
served in the manner provided in clause [a], by affixing a
copy thereof to some conspicuous part of the factory or
warehouse or other place of business or usual place of
residence of the person for whom such decision, order,
summons or notice, as the case may be, is intended;
[c] if the decision, order, summons or notice cannot be
served in the manner provided in clauses [a] and [b], by
affixing a copy thereof on the notice-board of the officer or
authority who or which passed such decision or order or
issued such summons or notice.
15. Section 9 of the General Clauses Act, 1897 has prescribed for commencement
and termination of time. The rule is well established that where a particular
time is given from a certain date within which an act is to be done, the day
on that day is to be excluded; the effect of defining the period from such a
day until such a day within which an act is to be done is to exclude the first
day and to include the last day. If the normal period of limitation of two
months under sub-section [3] of Section 85 of the Finance Act is to be
counted with the date of communication of the Order-in-Original as
24.03.2022, then the period of two months is to be counted by excluding
24.03.2022 and by including last day when the period of two month would
Page No. 10/15
expire. Thus, in the present case, the normal period of limitation of two
months for presentation of the appeal had expired on 24.05.2022.
16. The Commissioner of Central Excise [Appeal] as the Appellate Authority has
been vested with the power to allow presentation of the appeal within a
further period of one month, provided he is satisfied that the appellant was
prevented by sufficient cause from presenting the appeal within a period of
two months. In the above view of the matter, the extended period of
limitation would have expired on 24.06.2022.
17. It is true that the obligation to show sufficient cause is always upon the
appellant if the appeal is presented beyond the ordinary period of limitation
and within the period, which can be condoned under the proviso to sub-
section [3A] of Section 85 of the Finance Act. It is not specifically laid down in
sub-section [3A] of the Section 85 that the cause, which is to be sufficient, is
to be explained in a separate application. The cause can also be explained in
the memo of appeal.
18. Mr. Mishra, learned counsel for the petitioner has fairly submitted that in the
memo of appeal, the petitioner did not offer any explanation as regard the
reason[s] for the delay beyond two months, with a prayer to condone the
delay, which had occurred in presentation of the appeal before the Appellate
Authority.
19. From the above discussion, it has clearly emerged that though the appeal was
not presented by the petitioner within the normal period of limitation of two
months and was presented beyond a period of two months, but, before expiry
of three months from the date of communication of the date of Order-in-
Original. In other words, the appeal presented on 20.06.2022 was before
expiry of three months from the date of communication of the Order-in-
Original dated 16.03.2022 to the petitioner, even if the date of its receipt is
Page No. 11/15
taken as 24.03.2022. By the Order-in-Original, the liability with which the
petitioner has been saddled with by the Order-in-Original has already been
mentioned above. In view of dismissal of the appeal of the petitioner on the
ground of limitation, which order has not merged with the Order-in-Original, it
is the petitioner who is to suffer prejudice if he is deprived of an opportunity
to assail the legality and validity of the Order-in-Original on merits.
20. This Court is of the considered view that merely for the reason that the
petitioner as an appellant did not file any separate application along with the
appeal, which was presented with delay, explaining the reasons for late
presentation of the appeal, the petitioner should not be deprived of atleast
one opportunity to explain the reasons why the appeal could not be
presented within the normal period of limitation of two months and the same
had to be presented beyond such normal period of limitation but within the
extended period of limitation.
21. Order XLI of the Code of Civil Procedure, 1908 has provided for Appeals from
Original Decrees. Sub-rule [1] of Rule 3A of Order XLI, CPC has prescribed
that when an appeal is presented after the expiry of the period of limitation
specified therefore, 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.
22. In this connection, the decision of the Hon’ble Supreme Court in State of
Madhya Pradesh and another vs. Pradeep Kumar and another, [2000] 7
SCC 372 , can be referred to.
23. In the context of sub-rule [1] of Rule 3A, the Hon’ble Court has observed as
under :-
Page No. 12/15
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
mistake 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 two-fold. 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
Page No. 13/15
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.
20. In the result we allow this appeal and set aside the impugned
judgment. The matter shall now go back to the High Court for disposal
of the application to condone the delay in filing the second appeal. If
the explanation was found satisfactory to the High Court the second
appeal will have to be disposed of in accordance with law. This appeal
is disposed of accordingly.
24. As per sub-section [5] of Section 85 of the Finance Act, subject to the
provisions of Chapter V of the Finance Act, the Appellate Authority, that is,
the Commissioner of Central Excise [Appeals] in hearing the appeals and
making orders under Section 85 shall exercise the same powers and follow
the same procedure as he exercises and follows in hearing the appeals and
making orders under the Central Excise Act 1944.
25. The procedure in appeal has been delineated in Section 35A of the Central
Excise Act, 1944. As per sub-section [1] of Section 35A, the Commissioner
[Appeals] shall give an opportunity to the appellant to be heard, if he so
desires. As per sub-section [2] thereof, the Commissioner [Appeals] may, at
Page No. 14/15
the hearing of an appeal, allow an appellant to go into any ground of appeal
not specified in the grounds of appeal, if the Commissioner [Appeals] is
satisfied that the omission of that ground from the grounds of appeal was not
wilful or unreasonable. As per sub-section [5] of Section 35A, on the disposal
of the appeal, the Commissioner [Appeals] shall communicate the order
passed by him to the appellant and other authorities. It is inherent in the
prescription of Section 35A for the Appellate Authority to provide a reasonable
opportunity to an appellant.
26. This Court is of the considered view that the same principle, as outlined in
Pradeep Kumar [supra], is applicable on all fours in case of appeals of the
present nature presented wherein the proviso to sub-section [3A] of Section
85 of the Finance Act is found to have attracted. In other words, if an appeal
is sought to be presented beyond the normal period of two months but within
a further period of one month without providing any explanation for the
period of delay occurred in presentation either in the memo of appeal, or in a
separate application, then the Appellate Authority should provide atleast one
opportunity to the appellant to explain the delay showing sufficient cause.
27. The Appellate Authority is found to have maintained silence in the matter of
condonation of delay in presentation of the appeal on behalf of the petitioner
on 20.06.2022 despite the appeal was presented within the extended period
of limitation. If the Appellate Authority finds that the appeal presented by the
petitioner within the extended period of limitation is without any application
for condonation of delay, then before dismissing the appeal as time-barred,
even in the absence of any explanation as regards the delay caused in the
memo of appeal, the Appellate Authority is cast with an obligation to provide
atleast one opportunity to the appellant, that is, the petitioner to submit an
application to explain the reasons which caused the delay in presentation of
the appeal, if the appellant intents to do so. It is only after grant of such an
opportunity and non-filing of an application by the applicant for condonation
Page No. 15/15
of delay, the Appellate Authority should have proceeded to dismiss the appeal
on the ground of delay. If in the event the appellant after being so allowed,
submits an application explaining the reasons for delay then it is incumbent
on the part of the Appellate Authority to consider the explanation provided by
the appellant for the period of delay and depending upon the satisfaction
reached on such explanation, to proceed to take a decision as regards
presence of sufficient cause or otherwise.
28. Having not proceeded in the afore-stated manner, the Order dated
03.08.2023 is found to be not sustainable in law and is liable to be set aside
and quashed. It is accordingly, set aside and quashed.
29. In view of setting aside and quashing of the Order dated 03.08.2023, the
matter stands reverted back to the Appellate Authority. The Appellate
Authority shall provide an opportunity to the appellant to file an application
for condonation of delay wherein the appellant can provide the explanation as
to why the period of delay occurred beyond 24.05.2022 is required to be
condoned. If such an application is filed and the explanation is found
satisfactory to the Appellate Authority then the appeal presented by the
petitioner has to be disposed of in accordance with law. If, on the other hand,
the Appellate Authority reaches a view that the appellant has failed to show
sufficient cause, then an appropriate order is to be passed.
Digitally signed by Ananta
Konwar
Date: 2026.05.26 15:17:42 +05'30'
JUDGE
Comparing Assistant