2014 (3) TMI 1223 - HC - VAT and Sales Tax

Tax appeal delay of 342 days condoned under section 78 despite substantial revenue implications

Gujarat HC condoned 342-day delay in filing tax appeal under section 78. Court held it has power to condone delay in appeals under section 78, despite ... Seeking condonation of delay of 342 days in filing appeal - Court has power to condone the delay or not - sufficient explanation rendered by the applicant for the delay caused in filing the appeal or not. Power of the High Court to condone the delay in the Tax Appeal presented under section 78 of the Act - HELD THAT:- Section 84 of the Act empowers the Court competent to hear the appeals under section 78 of the Act and to accept such appeals after the period of limitation has expired, provided that the Court is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of limitation. It is true that in section 84 of the Act, the reference is to the Appellate Authority of the Tribunal. There is no specific mention to the High Court. Nevertheless what is of significance is that such power to condone the delay on being satisfied that the appellant had sufficient cause preventing him from preferring appeal, is available in the case of an appeal preferred under section 78 of the Act also. Section 78 of the Act, pertains to an appeal to the High Court. Under the circumstances, the legislature intended to empower the High Court also to condone the delay for sufficient cause in the case of appeals filed under section 78 of the Act. This is precisely what this Court in the case of Rama News Print and Papers Ltd. [2011 (1) TMI 1276 - GUJARAT HIGH COURT] held that 'the contention raised on behalf of the respondent that the High Court has no power to condone the delay in respect of an appeal preferred under section 78 of the Act, does not merit acceptance and is, accordingly, rejected'. Sufficient explanation for delay or not - HELD THAT:- Considering the administrative processes involved and the substantial revenue implication of Rs. 21 crore, it is noted that similar delays had been condoned in previous cases involving significant tax amounts, such as State of Gujarat v. Tolat Electronics [2015 (3) TMI 257 - GUJARAT HIGH COURT] and State of Gujarat v. Welspun Gujarat Stahl Rohren Ltd. [2013 (3) TMI 626 - GUJARAT HIGH COURT] where the delay was condoned on account of public interest. The delay is condoned in filing both the appeals on condition that the applicant pays costs of Rs.25,000/- in each of the appeals, which shall be done latest by April 30, 2014 - Application disposed off. Issues Involved:1. Power of the High Court to condone delay in Tax Appeals u/s 78 of the Gujarat Value Added Tax Act, 2003.2. Explanation for the delay in filing the Tax Appeals.Summary:1. Power of the High Court to Condon the Delay:The primary issue was whether the High Court has the authority to condone the delay in filing Tax Appeals u/s 78 of the Gujarat Value Added Tax Act, 2003. The opponent argued that the High Court lacks this power, citing sections 77 and 78 of the Act and section 5 of the Limitation Act, 1963. They relied on the Bombay High Court's decision in Commissioner of Sales Tax v. N.H. Polymers, which held that section 5 of the Limitation Act does not apply to proceedings under the Bombay Sales Tax Act.However, the Court referred to section 84 of the Act, which allows the Appellate Authority or the Tribunal to extend the period of limitation if sufficient cause is shown. The Court interpreted that this power extends to the High Court as well, despite the absence of explicit mention. This interpretation was supported by the Division Bench decision in State of Gujarat v. M/s. Rama Newsprint & Papers Ltd., which held that the High Court could condone delays in appeals filed u/s 78 of the Act by reading the words 'the High Court may admit an appeal' into section 84.2. Explanation for the Delay:The applicant-State explained the delay of 342 days in filing the Tax Appeals, attributing it to the procedural requirements of obtaining opinions from various officers, approval from the Finance Department, and the subsequent preparation and filing of the appeal by the Government Pleader's office. The opponent contended that the explanation was unsatisfactory and the delay was gross.The Court considered the administrative processes involved and the substantial revenue implication of Rs. 21 crore. It noted that similar delays had been condoned in previous cases involving significant tax amounts, such as State of Gujarat v. Tolat Electronics and State of Gujarat v. Welspun Gujarat Stahl Rohren Ltd. The Court emphasized that public interest and the impersonal nature of government machinery warrant a more lenient approach towards condoning delays.Conclusion:The Court condoned the delay in filing both appeals, subject to the applicant paying costs of Rs. 25,000 in each appeal by April 30, 2014. The Civil Applications were disposed of, and the rule was made absolute accordingly.