2007 (11) TMI 563 - HC - VAT and Sales Tax

Notice of Motion for Condonation Dismissed, Application for Reference Not Maintainable

Commissioner Of Sales Tax, Maharashtra State, Mumbai Versus NH. Polymers

The High Court dismissed the notice of motion for condonation of a 130-day delay, rendering the application for reference non-maintainable. The court held ... Whether section 5 of the Limitation Act would be applicable, when an application is moved under the first proviso to sub-section (1) of section 61 of the Act? Held that:- The Act expressly and/or by necessary implication excludes the power of the High Court to condone the delay in making application beyond the period of limitation of 90 days, except to the extent of sections 4 and 12 of the Limitation Act. This being the position, the mere fact that the law was understood otherwise is immaterial. On a reading of the provisions of the Act, the court has no jurisdiction to entertain an application beyond 90 days, except to the extent of considering the period under sections 4 and 12 of the Limitation Act. In the light of above discussion, the notice of motion for condonation of delay of 130 days is not maintainable and consequently the motion is dismissed. As the motion is dismissed, consequently, the application for reference is dismissed as not maintainable. Issues Involved:1. Determination of sales tax rates for synthetic adhesives and textile binders.2. Application of Section 5 of the Limitation Act, 1963 to proceedings under the Bombay Sales Tax Act, 1959.3. Jurisdiction of the High Court to condone delays in filing applications under the Bombay Sales Tax Act, 1959.Issue-wise Detailed Analysis:1. Determination of Sales Tax Rates for Synthetic Adhesives and Textile Binders:The respondents, engaged in manufacturing synthetic adhesives and textile binders, sought clarification on the applicable sales tax rates from the Commissioner of Sales Tax. The Commissioner, in an order dated January 31, 1998, classified the items under entry C-II 152, subjecting them to a 13% sales tax. The respondents appealed to the Maharashtra Sales Tax Tribunal, which, on August 31, 2002, ruled that the items fell under entry C-I, attracting a lower tax rate of 4%.2. Application of Section 5 of the Limitation Act, 1963 to Proceedings under the Bombay Sales Tax Act, 1959:The applicants contested the Tribunal's decision and filed a Reference Application No. 122 of 2002, which was rejected on June 15, 2005. The subsequent application to the High Court was delayed beyond the 90-day period stipulated under Section 61 of the Bombay Sales Tax Act, 1959. The core issue was whether Section 5 of the Limitation Act, 1963, which allows for the condonation of delays, applied to applications under the Bombay Sales Tax Act. The respondents argued that the High Court lacked the authority to condone such delays, as the Act did not explicitly grant this power. The applicants contended that since the application was made to a 'court,' Section 5 of the Limitation Act should apply.3. Jurisdiction of the High Court to Condon Delays in Filing Applications under the Bombay Sales Tax Act, 1959:The High Court examined whether Section 5 of the Limitation Act could be invoked for applications under Section 61 of the Bombay Sales Tax Act. It noted that historically, the court had entertained applications for condonation of delay without a decided case law on this specific point. The court referred to various provisions of the Act, including Sections 59 and 60, which incorporate certain aspects of the Limitation Act but do not explicitly include Section 5. The court cited precedents, including Mehta Construction Company v. State of Maharashtra and Fairgrowth Investments Ltd., to support the view that Section 5 of the Limitation Act does not apply to proceedings before a Tribunal or administrative authority, which are not courts.The court further analyzed Section 29(2) of the Limitation Act, which stipulates that the provisions of the Limitation Act apply to special or local laws only if not expressly excluded. The Act's specific inclusion of Sections 4 and 12 of the Limitation Act, and the exclusion of Section 5, indicated a legislative intent to limit the application of the Limitation Act's provisions.The court concluded that the Bombay Sales Tax Act, 1959, expressly and by necessary implication, excluded the application of Section 5 of the Limitation Act to applications under Section 61. Therefore, the High Court lacked the jurisdiction to condone delays beyond the 90-day period stipulated in the Act, except as provided under Sections 4 and 12 of the Limitation Act.Judgment:The High Court dismissed the notice of motion for condonation of a 130-day delay, rendering the application for reference non-maintainable. The court emphasized that the Act is a self-contained code and the specific provisions of Sections 4 and 12 of the Limitation Act were the only applicable sections for computing the period of limitation under Section 61. The decision underscored the importance of adhering to the statutory time limits in fiscal matters to ensure the steady inflow of revenue and financial stability of the state.