2019 (4) TMI 1061 - HC - VAT and Sales Tax

Court allows revision petitions challenging Tribunal's order on tax issues, emphasizes fair consideration of case

The Court allowed the revision petitions challenging the Tribunal's order on Delay Condonation Applications related to taxability issues under U.P. VAT ... Rate of tax - projector machine/Plant and machinery which are manufactured and sold by the revisionist company - Claim of the revisionist is that items manufactured are taxable at the rate of 4% whereas the assessing authority has imposed the tax treating the said item as unclassified fixing tax liability @ 12.5% - principles of natural justice. HELD THAT:- In the instant case the Tribunal has failed to consider the bonafide explanation offered by the revisionist that admittedly, there was no fault on the part of the revisionist and since the counsel representing the assessee failed to appear before the first appellate authority and failed to provide any intimation to the revisionist about the fate of the case, the delay is caused. The explanation of the revisionist prima facie appears reasonable, genuine and bonafide. The explanation offered by the revisionist is adequate. Once the counsel representing the revisionist accepted his failure to discharge his duties, the assessee should not be punished. The matters are remanded to the Tribunal to examine the issues on merits Issues:Taxability of projector machine/Plant and machinery at different rates under U.P. VAT Act and Central Sales Tax Act, Delay Condonation Application No. 40 of 2018, Delay Condonation Application No. 41 of 2018, Appeal against assessment order, Ex parte orders by first appellate authority, Delay in filing second appeals, Tribunal's consideration of delay condonation application, Rejection of delay condonation application, Comparison with judgment in M/s Anil Enterprises case, Failure of counsel to inform revisionist about proceedings.Analysis:The revision petitions challenge the common order of the Commercial Tax Tribunal concerning two Delay Condonation Applications for the assessment year 2008-09 under U.P. VAT Act and Central Sales Tax Act. The revisionist company, engaged in manufacturing data projector machines, contests the taxability of its products at 4% against the assessing authority's imposition of 12.5% tax rate, treating the items as unclassified based on a prior order by the Commissioner, Commercial Tax U.P. The assessment order was passed under relevant sections of the U.P. VAT Act and Central Sales Tax Act, leading to appeals filed by the revisionist against ex parte orders by the first appellate authority.The first appellate authority's ex parte orders were based on the revisionist's failure to appear despite adjournments, resulting in the imposition of tax at 12.5%. Subsequently, second appeals were filed beyond the limitation period, attributing the delay to the previous counsel's failure to inform about the first appellate authority's decision. The Tribunal considered the delay condonation application, noting the significant delay of 3 years and 222 days, and the revisionist's explanations regarding the counsel's inaction and lack of communication.The Tribunal, however, rejected the delay condonation applications, citing the judgment in the case of M/s Anil Enterprises and emphasizing the revisionist's responsibility for the counsel's actions. The Court found the circumstances in the present case distinct from M/s Anil Enterprises, acknowledging the revisionist's genuine and reasonable explanation for the delay caused by the counsel's failure to fulfill obligations. Consequently, the revision petitions were allowed, setting aside the Tribunal's order and remanding the matters for a fresh examination on merits within six months.In conclusion, the judgment addresses the taxability dispute, procedural lapses in the appellate process, and the Tribunal's evaluation of delay condonation applications, emphasizing the revisionist's justifiable explanation for the delay and the need for a fair consideration of the case on its merits.