High Court Quashes Orders, Allows Tax Appeal with Cost Imposed for Delay

The High Court allowed the Tax Appeal, quashing the impugned orders and directing the first appellate authority to entertain the appeal upon payment of a cost of Rs.10,000 within three weeks. The Court found the delay in filing the appeal justified due to circumstances such as the closure of the factory and the proprietor settling in the USA, without any mala fide intention. It held that the tribunal erred in not exercising discretion judiciously and emphasized that the cost was for condonation of delay. The Court instructed the first appellate authority to decide the appeal on its merits, keeping all contentions open for consideration.

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Issues involved:
1. Whether the tribunal was justified in summarily disposing the application for condonation of delay and the appealRs.
2. Whether service by affixation of notice would amount to a valid service under the Gujarat Sales Tax Act, 1969Rs.

Issue 1:
The appellant challenged the impugned judgment and order passed by the Gujarat Value Added Tax Tribunal, which dismissed the appeal confirming the order passed by the Deputy Commissioner of Commercial Tax. The appellant sought condonation of delay due to various reasons, including the closure of the business, the proprietor settling in the USA, and lack of awareness about the assessment proceedings. The first appellate authority dismissed the application for condonation of delay, leading to the appeal before the tribunal. The appellant argued that there was no deliberate delay and requested the tribunal to consider the appeal on merits. The tribunal dismissed the appeal, prompting the appellant to file the present Tax Appeal raising questions of law.

Issue 2:
The appellant contended that the notice affixed at the factory premises, due to the proprietor's absence, did not constitute valid service. The appellant's advocate argued that the factory had been closed since 1994, taken over by GIDC in 1997, and the proprietor had settled in the USA since 1995. The appellant maintained that the tribunal erred in considering the affixed notice as valid service. The respondent, opposing the appeal, highlighted the significant delay in filing the appeal and argued that the proprietor should have been aware of the proceedings during visits to India. The respondent supported the tribunal's decision to dismiss the appeal based on the delay.

Judgment:
The High Court observed that the delay of approximately ten years in filing the appeal was due to circumstances such as the closure of the factory, the proprietor settling in the USA, and the possession being taken over by GIDC. The Court found no mala fide intention in the delay and deemed it necessary to condone the delay by imposing a reasonable cost. It held that the tribunal erred in not exercising discretion judiciously and allowed the Tax Appeal. The impugned orders were quashed, and the first appellate authority was directed to entertain the appeal on the condition that the appellant pays a cost of Rs.10,000 within three weeks. The Court emphasized that the cost was for condonation of delay and instructed the first appellate authority to decide the appeal on its merits. All contentions were kept open for consideration, and the Tax Appeal was allowed accordingly.

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