1985 (1) TMI 291 - HC - VAT and Sales Tax

High Court overturns Sales Tax Tribunal's default dismissal, orders restoration & emphasizes fair hearings

Asian Paints (India) Ltd. Versus State of MP and Others

The High Court set aside the Sales Tax Tribunal's orders dismissing the appeal in default and refusing its restoration. The Court directed the Tribunal to ... - Issues:1. Dismissal of appeal in default by the Sales Tax Tribunal for failure to appear.2. Refusal to restore the appeal by the Tribunal.3. Legal representation and actions of the petitioner's counsel.4. Justification of dismissal of appeal by the Tribunal.5. Adjourning the hearing and restoration of the appeal.6. Exercise of power to dismiss in default by the Tribunal.Detailed Analysis:1. The petitioner, a sales tax assessee, filed a petition under articles 226 and 227 of the Constitution challenging the dismissal of their appeal by the Sales Tax Tribunal for failure to appear. The appeal related to deductions disallowed in the assessment for the year 1977. The petitioner's first appeal was rejected, leading to a second appeal before the Tribunal. The petitioner's counsel sought adjournment due to prior commitments, but the Tribunal dismissed the appeal in default on the ground of insufficient cause for adjournment.2. The petitioner's counsel made efforts to restore the appeal, but the Tribunal dismissed the application for restoration, stating it lacked sufficient cause. The respondents argued that the Tribunal was justified in its actions and suggested the petitioner should have made a reference to the High Court under section 44(1) of the Sales Tax Act. The Tribunal did not address the appeal's merits, focusing solely on the dismissal for non-appearance and subsequent refusal to restore the appeal.3. The petitioner's counsel, a Chartered Accountant, had sought adjournment before the hearing but was unable to attend due to prior commitments. The petitioner argued that the dismissal of the appeal and refusal to restore it were harsh, emphasizing that the Tribunal should have considered principles of natural justice and given a proper hearing. The petitioner cited legal precedents to support the contention that the party should not suffer due to counsel's inaction.4. The Government Advocate opposed the petitioner's stance, asserting that the Tribunal was justified in dismissing the appeal due to the petitioner's lack of vigilance. However, it was noted that the Tribunal should exercise the power to dismiss in default exceptionally, not routinely. The Tribunal was expected to decide on merits and could have adjourned the hearing subject to costs, which was not done in this case.5. The High Court opined that the power to dismiss in default should be used sparingly and that the Tribunal should have decided the appeal on its merits. The Court found that the dismissal of the appeal and refusal to restore it were not justified in this case. Consequently, the Court allowed the petition, set aside the Tribunal's orders, and directed the Tribunal to restore the appeal and decide on merits within four months, subject to payment of costs by the petitioner.6. The Court emphasized the importance of fairness and justice in handling such matters and highlighted that the petitioner should not be entitled to adjournment without sufficient cause. The Court also directed the petitioner to pay costs and counsel's fee within a specified timeframe, failing which the Tribunal's order would stand. Ultimately, the writ petition was allowed in favor of the petitioner.