2018 (9) TMI 173 – GUJARAT HIGH COURT – [2018] 59 G S.T.R. 329 (Guj) – Rectification application – rejection of rectification application on the ground that the assessee had not raised such a contention before the Tribunal, or even before the lower authorities earlier and any exercise by the Tribunal to entertain such a contention to modify the order would amount to review- a power which the Tribunal does not possess.
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Held that:- In the present case, judgment of the Tribunal was passed on 29th June 2015. The Appeal was filed before the High Court sometime thereafter. Even after the High Court dismissed the appeal on 28th January 2016, it appears from the record that the rectification application was filed nearly six months later. Therefore, only on the question of limitation, rectification application could have been dismissed by the Tribunal; though Tribunal did not advert to this aspect of the matter.
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When the High Court dismissed the appeal of assessee in the earlier r
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ite opposition by the assessee, the same were confirmed. The issue travelled to the Tribunal. The Tribunal, by the judgment dated 29th June 2015 rejected the appeal, upon which further appeal was filed before the High Court. Such Tax Appeal came to be disposed of by the judgment dated 28th January 2016. The Court did not find any merits in the contention raised by the learned counsel for assessee on the issues arising in such appeal. It was, however, lastly contended that the assessee should have been granted benefit of reduced penalty as per proviso to Section 78 of the Finance Act, 1994. In this context, the Court made the following observations : 11. Counsel lastly contended that by virtue of proviso to Section 78, if the tax demand is based on records maintained by the assessee, the penalty would be 50% of otherwise imposable. He pointed out that the term specified record used in the said provision has now been defined by including an explanation to Section 78. However, we notice t
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d the second question was-whether the Tribunal was correct in dismissing the application on merits. We are conscious that the first of these two issues were not pressed into service by the Tribunal, nevertheless, we were prima facie of the opinion that the application for rectification filed by the assessee had to satisfy the requirement of the period of limitation prescribed. Learned advocate Shri Dhaval Shah for the assessee submitted that in the Finance Act, 1994 where the appeal provisions in connection with the service tax are contained, provide for no period of limitation for filing an application for rectification. He drew our attention to Section 86 of the Finance Act, 1994. We, however, notice that Section 86 itself does not contain any provision giving power to the Tribunal to rectify its own orders. Sub-section [6A] of Section 86 merely prescribes a fee to be paid for making such an application. This cannot be seen as a source of power for rectification. Subsection [7] of Se
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Thus, the power of the Tribunal while disposing of appeals in terms of Section 86 of the Finance Act, 1994 would also contain power of rectification. The source of such power can be traced to Section 35C of the Central Excise Act, 1944 which would be coupled with the prescription of period of limitation provided therein. Learned advocate Shri Shah, however, submitted that such time limit is not rigid and on sufficient cause being shown, can be extended. Reliance was placed on a decision of the Supreme Court in case of Sunitadevi Singhania Hospital Trust & Anr. vs. Union of India & Ors., reported in [2008] 16 SCC 365. In the said case, while observing that powers of rectification could be exercised beyond six months, it was further observed that the same cannot be done beyond reasonable period. In the said case, the Court was also influenced by the fact that the party was pursuing remedy bona fide before another Court. In the present case, judgment of the Tribunal was passed on
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