1991 (3) TMI 355 - HC - VAT and Sales Tax

Court upholds Tribunal decision denying appeal delay condonation. Precedent not sufficient cause. Department prevails.

The High Court affirmed the Tribunal's decision, holding that the applicant did not establish sufficient cause for the delay in filing the appeal. The ... - Issues Involved:1. Whether the Tribunal was right in holding that the reliance placed by the applicant on a previous Tribunal decision constituted 'sufficient cause' for condonation of delay.2. Whether the Tribunal was correct in not condoning the delay when the appeal was filed after the High Court had reversed the Tribunal's earlier decision.Detailed Analysis:Issue 1: Sufficient Cause for Condonation of DelayThe applicant, Baroda Rayon Corporation Ltd., claimed that their reliance on the Tribunal's decision in the case of Prabhat Solvent Extraction Industries Pvt. Ltd. constituted a 'sufficient cause' for not filing their appeal within the prescribed period. The Tribunal had previously held that under the proviso to rule 42 of the Gujarat Sales Tax Rules, 1970, a deduction of 3% of the sale price of consigned goods must be made from the total set-off admissible to the dealer. Based on this interpretation, the applicant did not file an appeal against the Assistant Commissioner's order. However, the Gujarat High Court later reversed this decision, stating that the deduction should be confined to the drawback, set-off, and refund in respect of tax paid on purchases used in the manufacture of goods sold on consignment basis outside the State but within India.The applicant argued that their reliance on the Tribunal's earlier decision should be considered a competent plea for condonation of delay. They contended that it was reasonable to not file an appeal initially due to the binding nature of the Tribunal's decision on subordinate authorities. The applicant also emphasized a liberal approach in matters of condonation of delay, especially in fiscal statutes where delay is unlikely to prejudice the State.Issue 2: Tribunal's Refusal to Condon DelayThe Tribunal rejected the applicant's plea for condonation of delay, asserting that the decision in Prabhat Solvent Extraction Industries did not constitute 'sufficient cause' for not filing an appeal within the prescribed time. The Tribunal maintained that an adverse decision in a different matter could not be regarded as a sufficient cause for not preferring an appeal. The Tribunal's decision was based on the premise that it did not settle the law for the State but merely interpreted a provision of law.The applicant relied on several precedents to support their plea, including:- Kamala Mills Ltd. v. State of Bombay: The Supreme Court held that a mistake discovered late could be a competent plea for condonation of delay.- Karamchand Premchand Put. Ltd. v. Commissioner of Income-tax: This Court allowed condonation of delay where the legal position was settled by High Courts and later reversed by the Supreme Court.- State of Andhra Pradesh v. Venkataramana Chuduva & Muramura Merchant: The Andhra Pradesh High Court held that a subsequent decision changing the legal position could constitute sufficient cause for condonation of delay.However, the High Court distinguished these cases, noting that the decision in Prabhat Solvent Extraction Industries was not a settled law by a High Court but a recent Tribunal decision. The Court emphasized that the Tribunal's decision did not have the effect of settling law for the State.ConclusionThe High Court concluded that the Tribunal was right in holding that the applicant had not made out a sufficient cause for not filing the appeal within the prescribed time. The Tribunal's decision was affirmed, and the reference was answered in the affirmative, against the assessee and in favor of the department. There was no order as to costs in this reference.Reference Answered in the Affirmative.