2020 (5) TMI 149 - SC - VAT and Sales Tax

Appeal Allowed: SC Overturns HC Judgment for Exceeding Jurisdiction Under Article 226, Emphasizes Adherence to Statutory Limits.

Assistant Commissioner (CT) LTU, Kakinada & Ors. Versus M/s. Glaxo Smith Kline Consumer Health Care Limited

The SC allowed the appeal, setting aside the HC's judgment that had entertained a writ petition challenging an assessment order after the statutory appeal ... Power of High Court to entertain writ petition - The option to file statutory appeal was foreclosed by time limitation including extended period of limitation - whether the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India ought to entertain a challenge to the assessment order on the sole ground that the statutory remedy of appeal against that order stood foreclosed by the law of limitation? HELD THAT:- The assessment order dated 21.6.2017 was challenged by the respondent by way of statutory appeal before the Appellate Deputy Commissioner only on 24.9.2018. Section 31 of the 2005 Act provides for the statutory remedy against an assessment order. The same, as applicable at the relevant time - Section 31 states that the statutory appeal is required to be filed within 30 days from the date on which the order or proceeding was served on the assessee. If the appeal is filed after expiry of prescribed period, the appellate authority is empowered to condone the delay in filing the appeal, only if it is filed within a further period of not exceeding 30 days and sufficient cause for not preferring the appeal within prescribed time is made out. The appellate authority is not empowered to condone delay beyond the aggregate period of 60 days from the date of order or service of proceeding on the assessee, as the case may be. In the present case, admittedly, the appeal was filed way beyond the total 60 days’ period specified in terms of Section 31 of the 2005 Act. In that, the respondent had filed the appeal accompanied by an application for condonation of delay setting out reasons - The High Court finally allowed the writ petition vide the impugned judgment and order on the ground that the statutory remedy had become ineffective for the respondent (writ petitioner) due to expiry of 60 days from the date of service of the assessment order. Inasmuch as, the appellate authority had no jurisdiction to condone the delay after expiry of 60 days, despite the reason mentioned by the respondent of an extraordinary situation due to the act of commission and omission of its employee who was in charge of the tax matters, forcing the management to suspend him and initiate disciplinary proceedings against him. Soon after becoming aware about the assessment order, the respondent had filed the appeal, but that was after expiry of 60 days’ period. Whether the High Court ought to have entertained the writ petition filed by the respondent? - HELD THAT:- As regards the power of the High Court to issue directions, orders or writs in exercise of its jurisdiction under Article 226 of the Constitution of India, the same is no more res integra. Even though the High Court can entertain a writ petition against any order or direction passed/action taken by the State under Article 226 of the Constitution, it ought not to do so as a matter of course when the aggrieved person could have availed of an effective alternative remedy in the manner prescribed by law. The principle underlying the dictum in this decision would apply proprio vigore to Section 31 of the 2005 Act including to the powers of the High Court under Article 226 of the Constitution. Notably, in this decision, a submission was canvassed by the assessee that in the peculiar facts of that case (as urged in the present case), the Court may exercise its jurisdiction under Article 142 of the Constitution, so that complete justice can be done - Thus, what this Court cannot do in exercise of its plenary powers under Article 142 of the Constitution, it is unfathomable as to how the High Court can take a different approach in the matter in reference to Article 226 of the Constitution. The principle underlying the rejection of such argument by this Court would apply on all fours to the exercise of power by the High Court under Article 226 of the Constitution. The remedy of appeal is creature of statute. If the appeal is presented by the assessee beyond the extended statutory limitation period of 60 days in terms of Section 31 of the 2005 Act and is, therefore, not entertained, it is incomprehensible as to how it would become a case of violation of fundamental right, much less statutory or legal right as such - Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non­compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24.9.2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all. The High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold - Appeal allowed. Issues Involved:1. Whether the High Court ought to entertain a challenge to an assessment order under Article 226 of the Constitution of India when the statutory remedy of appeal is foreclosed by the law of limitation.2. Whether the High Court exceeded its jurisdiction by setting aside the assessment order dated 21.06.2017 passed by the Assistant Commissioner.3. Whether the explanation provided by the respondent for the delay in filing the appeal was sufficient and justified.Issue-Wise Detailed Analysis:1. High Court’s Jurisdiction Under Article 226:The central question was whether the High Court should entertain a writ petition challenging an assessment order when the statutory remedy of appeal is foreclosed by the law of limitation. The Supreme Court emphasized that although the High Court has wide jurisdiction under Article 226, it should exercise self-imposed restraint and not entertain writ petitions if an alternative effective remedy is available. The Court cited several precedents, including Thansingh Nathmal & Ors. vs. Superintendent of Taxes, Dhubri & Ors. and Titaghur Paper Mills Co. Ltd. & Anr. vs. State of Orissa & Ors., to underline that the High Court should not bypass the statutory remedy provided by law.2. Exceeding Jurisdiction by the High Court:The Supreme Court found that the High Court exceeded its jurisdiction by setting aside the assessment order dated 21.06.2017. The High Court entertained the writ petition despite the statutory period for filing an appeal having expired and the appellate authority having no jurisdiction to condone the delay beyond 60 days. The Supreme Court referred to its own decision in Oil And Natural Gas Corporation Limited vs. Gujarat Energy Transmission Corporation Limited & Ors., which held that even the Supreme Court cannot condone delays beyond the statutory period under Article 142 of the Constitution, implying that the High Court's action under Article 226 was unjustified.3. Explanation for Delay in Filing Appeal:The respondent argued that the delay was due to the negligence of an employee who was later suspended. The Supreme Court noted that the appellate authority had rejected this explanation as unsubstantiated. The High Court, however, did not examine this finding and instead focused on the respondent's ability to explain discrepancies in turnover and the payment of 12.5% of the disputed tax. The Supreme Court found that the respondent failed to provide a valid reason for not filing the appeal within the prescribed time and noted that no affidavits from the concerned employees were submitted to support the delay.Conclusion:The Supreme Court concluded that the High Court should not have entertained the writ petition filed by the respondent, as the statutory period for filing an appeal had long expired, and the respondent did not substantiate the reasons for the delay. The appeal was allowed, and the High Court's judgment was set aside, dismissing the writ petition. The Supreme Court reiterated that statutory provisions regarding limitation must be adhered to and cannot be bypassed by invoking the High Court's jurisdiction under Article 226 of the Constitution.