MP HC Sends Contractor’s ₹70-Lakh Service-Tax Appeal Back For Delay Explanation, Holds Dec 24 Filing Within Condonable Window

The appellant, a construction-service provider, challenged a service-tax demand confirmed by an Order-in-Original dated 28 August 2018.

The department’s records showed delivery of that order at his address on 22 September 2018; the appellant maintained that it reached him only on 7 October 2018, having first been received by a neighbour.

The Commissioner (Appeals) dismissed his appeal as delayed, holding that the delay exceeded the 30-day condonable period.

CESTAT upheld that decision.

The appellant appealed to the High Court, challenging the limitation calculation and asserting that he had not been given an opportunity to explain the delay.

Section 85(3A) of the Finance Act, 1994 requires an appeal to be presented within two months of receipt of the order and permits the Commissioner (Appeals), upon being satisfied that sufficient cause prevented timely filing, to allow presentation within a further period of one month.

Where an appeal is within that additional period, the Commissioner (Appeals) must consider whether sufficient cause is shown and cannot reject it on the mistaken basis that the statutory power to condone delay is unavailable.

The appellant must be afforded an opportunity to explain the delay before that question is decided.

Taking the department’s service date of 22 September 2018, the Court held that the two-month period expired on 22 November 2018 and the additional 30-day period ran from 23 November to 23 December 2018.

Since 23 December was a Sunday, the appeal filed on 24 December remained within the condonable period.

The Commissioner (Appeals) had instead treated the delay as one month and two days and concluded that it lacked power to condone it.

The Court found that conclusion legally erroneous under Section 85(3A) and further held that the appellant had not been given an opportunity to explain the delay.

The Court therefore did not need to determine the dispute over the actual date on which the appellant personally received the order.

It allowed the appeal, set aside CESTAT’s order dated 2 April 2026 and the Commissioner (Appeals)’ order dated 26 February 2019, and directed the department to consider the appeal after giving the appellant an opportunity to explain the delay.