Dispatch Of 2019 Service-Tax Order Didn’t Prove Receipt: CESTAT Remands Mumbai Taxpayer’s Appeal for Merits Hearing

In brief

The question

Whether limitation under Section 85(3A) of the Finance Act, 1994 runs from dispatch of the adjudicating order or from its receipt by the appellant.

The court held

The Tribunal set aside the limitation-based rejection and allowed the appeal by way of remand to the Commissioner (Appeals) for a decision on the merits.

It also directed

It directed the appellant to file an appropriate application explaining the facts and reasons relating to the alleged delay and non-receipt of the Order-in-Original.

01Facts

The Deputy Commissioner passed an Order-in-Original on 3 June 2019 and sent it to the appellant’s Jaipur address. The appellant said he had ceased business in Jaipur, moved to Mumbai, and did not receive either the show-cause notice or the Order-in-Original. He claimed to have first received notice of the order through a recovery notice, obtained a copy on 19 January 2022, and filed an appeal on 18 February 2022

¶ 3–4

The Commissioner (Appeals) rejected the appeal as time-barred, reasoning that the Order-in-Original had been dispatched by registered speed post in 2019 and had not been returned undelivered.

¶ 5

The appellant appealed that limitation ruling to the Tribunal.

¶ 1

02Issues

i.Whether limitation under Section 85(3A) of the Finance Act, 1994 runs from dispatch of the adjudicating order or from its receipt by the appellant.

¶ 6–7

ii.Whether the Commissioner (Appeals) was justified in rejecting the appeal as time-barred without determining the appellant’s asserted date of receipt and considering his explanation.

¶ 5, 8–9

03Law Applied

Section 85(3A) of the Finance Act, 1994 requires an appeal to be presented within two months from the date the appellant receives the adjudicating authority’s decision or order. The Commissioner (Appeals) may, on sufficient cause, allow presentation within a further period of one month.

¶ 6

The statutory period is triggered by receipt, not dispatch; the provision does not presume receipt merely because a dispatched order was not returned by the postal authority.

¶ 7

Provisions in the judgment · 1

Finance Act, 1994 Section 85

04Reasoning

The Tribunal found no evidence on record that the appellant received the Order-in-Original before 19 January 2022. Revenue relied on dispatch to the registered address and the absence of a returned postal article, but neither established receipt for the purpose of Section 85(3A).

¶ 7

If 19 January 2022 was the date of receipt, the appeal filed on 18 February 2022 would not be delayed. However, because the appellant had not filed an application before the Commissioner (Appeals) setting out the relevant facts—including the address change and reasons for non-receipt—the Tribunal directed him to provide that explanation on remand.

¶ 8–9

05Holding

The Tribunal set aside the limitation-based rejection and allowed the appeal by way of remand to the Commissioner (Appeals) for a decision on the merits.

¶ 9–10

It directed the appellant to file an appropriate application explaining the facts and reasons relating to the alleged delay and non-receipt of the Order-in-Original.

¶ 9–10

LawLens.CESTAT

Original Court PDF