Finance Act 1994

Case BriefsHigh Courts

Sikkim High Court: A Division Bench of Vijai Kumar Bist, CJ and Meenakshi Madan Rai, J. dismissed a writ petition filed against the order of the Commissioner of Customs, Central Excise and Service Tax (Appeal I) whereby he had rejected the application for condonation of delay filed by the petitioner along with an appeal from the order of the Joint Commissioner imposing service tax, interest and penalty under provisions of the Finance Act, 1994, on the petitioner.

In the said application for condonation of delay, no efforts were made by the petitioner to explain the delay from 15-08-2015 till 7-10-2016 (the date of filing the appeal before the Commissioner). While rejecting the application, the Commissioner recorded that the reasons for delay assigned by the petitioner were flimsy, and the period delay was also calculated irresponsibly and inaccurably.

Sourav Sen and Rupa Dhakal, Advocates for the petitioner Cooperative Society submitted that the case be considered on merits to subserve the ends of justice. Per contra, B.K. Gupta, Advocate appearing for the Commissioner, supported the impugned order.

The High Court noted that the application for condonation of delay reflected a lackadaisical approach on the part of the petitioner. It was observed: “We are conscious and aware that the law of limitation is sufficiently elastic to allow and enable the concerned Authorities to apply it for substantial justice, but at the same time it may be mentioned that merely because a non-pedantic approach should be adopted to an application for condonation of delay it is not essential that every delay including those in which the drafting has been done in a haphazard manner and with nary a care to detail or explanation pertaining to the delay with dates thereof be condoned.”

Reference was made to Supreme Court decision in Esha Bhattacharjee v. Raghunathpur Nafar Academy,(2013) 12 SCC 649, wherein it was, inter alia, held that an application for condonation of delay should be drafted with careful concern and not in a haphazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.

In such view of the matter, the Court was of the opinion that the impugned order suffered no infirmity. Resultantly it was held that the merits of the matter could not be looked into. The petition was thus dismissed.[Singbel GPU Construction Co-Operative Society Ltd. v. CCE, 2019 SCC OnLine Sikk 105, decided on 18-07-2019]

Case BriefsHigh Courts

Bombay High Court: S.C. Dharamadhikari and M.S. Karnik, JJ., dismissed an appeal filed against the order passed by Central Excise and Service Tax Appellate Tribunal, Mumbai (West Zone Bench) whereby it had allowed the respondent’s appeal against the order of the Commissioner of Central Excise and Service Tax confirming the demand of service tax of Rs 10,21,11,359.

The respondent had provided services for construction and upgradation of facilities at Shiv Chatrapati Sports Complex, Pune. According to the appellant, the services were covered under the category of “commercial or industrial services” defined under Section 65 (20 b) of the Finance Act, 1994 (prior to amendment vide Act 14 of 2010) as the said stadium was used for commercial purposes. A demand for payment of service tax was raised on the respondent but no payment was made. Representations were exchanged, and by order dated 15-9-2011, the demand of service tax was confirmed. As against this, the respondent approached CESTAT and the said order dated 15-9-2011 was set aside. Aggrieved thereby, the appellant filed the present appeal.

It was not even the case of the appellant that the stadium was exclusively used for commercial purpose. The relevant agreement itself permitted the Committee to use 1/3rd of the total area for commercial purpose. The question before the High Court was whether the user of stadium area to the extent of 1/3rd of the total area for a commercial purpose would tantamount to “commercial or industrial construction service”?

Perusing Section 65 (25-b), the Court observed, “The language employed in the definition clause is clear and unambiguous. The plain meaning as can be understood from the definition clause, more particularly, the clarification contained in clauses (i), (ii), (iii) is that the construction ipso facto is not leviable to service tax, but it is only when it is used, or to be used, primarily for “commerce” or “industry” or work intended for “commerce” or “industry” that service tax can be levied. Thus, it is only that construction which is to be used or primarily to be used for commerce that is subject to levy of service tax.”

Finding that in the present case, the dominant user of the stadium was non-commercial, the Court held that no service tax was attracted. Therefore, upholding the impugned order, the court dismissed the present appeals. [CCE v. B.J. Shirke Construction Technology (P) Ltd., 2019 SCC OnLine Bom 477, decided on 15-03-2019]