Procedure Cannot Defeat Substantive Justice: CESTAT Mumbai Sets Aside Appeal Rejection Over Delay

The Customs, Excise and Service Tax Appellate Tribunal at Mumbai has set aside an order of the Commissioner (Appeals) that had rejected a taxpayer's appeal solely because no application for condonation of delay was filed along with it, even though the delay was only 23 days. The tribunal held that procedural requirements cannot be applied in a manner that defeats substantive justice.

Judicial Member Ajay Sharma observed, "It is a settled principle that procedural requirements, including limitation, should not be applied in a manner that defeats substantive justice, particularly when the delay is marginal and satisfactorily explained. In the present case, the delay is only of 23 days, and the appellant has expressed willingness to file an appropriate application for condonation of delay if an opportunity is granted."

The case arose from an appeal filed by a Mumbai businessman Harshad Keshav Parab. He challenged an Order-in-Appeal dated November 6, 2023 passed by the Commissioner (Appeals), Mumbai. The appellate authority had rejected the appeal at the threshold on limitation grounds. It did so without going into the merits.

Parab said he had shifted his business to Byculla in 2022. Even so, the department sent the adjudication order dated July 29, 2022, along with hearing notices, to his old Lower Parel address. He pointed out that the change had already been intimated. The updated address also appeared in the mandatory pre-deposit.

The adjudication order reached the Lower Parel premises in August 2022. Parab received it only on September 6, 2022, through the current occupant. He filed his appeal on October 21, 2022.

He did so believing that limitation would run from the date of actual receipt.

Counsel argued that notices were not sent to the correct address. Because of this, Parab could not appear before the Commissioner (Appeals). He could not clarify the limitation position or file a condonation application.

Examining the record, the tribunal noted that the delay of 23 days stemmed from service of the order at the old address. It found no lack of bona fides in the Parab's conduct. It emphasised that procedural rules should not override substantive justice when the delay is marginal and explained.

The impugned order was set aside. The matter was remanded to the Commissioner (Appeals) for fresh consideration. The appellant has been directed to file a condonation application. This application shall be decided in accordance with law. If allowed, the appeal is to be heard on merits. The appellant must be given an opportunity to present evidence.

For Petitioner: Advocate Manoj Kasale

For Respondent: Sh.Dhananjay Dahiwale Dy.Commissioner(AR)