2023 (11) TMI 450 - HC - GST

Section 5 Limitation Act: Appeal dismissal quashed; petitioner entitled to hearing and fresh consideration within one month

The HC set aside the impugned order dismissing the appeal on the ground of limitation under Section 5 of the Limitation Act, 1963. It held that the ... Right to be heard before disposal of an appeal - condonation of delay under Section 5 of the Limitation Act - limitations as ground for dismissal of appeals - principal not to suffer for default of agent - reconsideration of appeal on meritsRight to be heard before disposal of an appeal - principal not to suffer for default of agent - condonation of delay under Section 5 of the Limitation Act - reconsideration of appeal on merits - Order dismissing the appellant's appeal as barred by limitation was set aside and the matter remitted for fresh consideration on merits after affording opportunity of hearing. - HELD THAT: - The High Court accepted the petitioner's plea that she had entrusted her accounts and tax matters to a Chartered Accountant who had provided the petitioner's contact details to the authority and thereafter absconded, leading to the petitioner's ignorance of the departmental order and delay in prosecuting the appeal. Relying upon the principle that a party who selects and places trust in his agent (or professional) should not be made to suffer for the agent's default, the Court held that the appellant was entitled to a hearing on the merits before the appellate authority and should not be finally prejudiced by dismissal solely on the ground of limitation. Applying that principle to the facts, the Court set aside the order of dismissal dated 27th June, 2023 and directed the appellate authority to afford a reasonable opportunity of hearing to all interested persons, reconsider the appeal on merits (including consideration of any application under Section 5 of the Limitation Act), and pass a reasoned order within the prescribed time-frame.Order dismissing the appeal on limitation set aside; appeal remitted to the appellate authority for reconsideration on merits after hearing, with a directive to decide within one month and communicate the decision within one week thereafter.Final Conclusion: The writ petition succeeds: the order dismissing the appeal as time-barred is set aside and the matter is remitted to the appellate authority for fresh, reasoned consideration on merits after affording the petitioner a hearing; the authority is directed to decide within one month and communicate the decision within a week. Issues involved: The issues involved in the judgment are related to the liability of a business proprietor for tax payment due to the actions of a Chartered Accountant (CA), the dismissal of an appeal on the ground of limitation, and the entitlement of the petitioner to a hearing on merits before any liability is imposed.Liability of Business Proprietor: The petitioner, a business proprietor, entrusted a CA with accounts, income tax, and GST matters for her business. However, the petitioner discovered that her bank account was blocked for GST recovery, and it was revealed that the CA had cheated many clients, including the petitioner. There was a demand against the petitioner's firm in 2018-2019, which was not deposited by the CA. The petitioner, unaware of an order directing payment of tax, filed an appeal with an application for condonation of delay under Section 5 of the Limitation Act, 1963.Dismissal of Appeal: The petitioner was directed to appear before the authority to explain the delay in filing the appeal. Despite submitting a reply, the appeal was dismissed solely on the ground of limitation. The petitioner's counsel argued for a hearing before the appellate authority and cited a Supreme Court authority emphasizing that a party should not suffer due to the actions of their advocate. The Court set aside the order dismissing the appeal and directed the authority to reconsider the appeal on merits after affording a reasonable opportunity of hearing.Entitlement to Hearing on Merits: The Court considered that the petitioner relied on the CA in good faith and was entitled to a hearing on merits before any liability was imposed. Citing the Supreme Court's observation, the Court held that the petitioner should not suffer for the actions of the CA. The order dismissing the appeal on the ground of limitation was set aside, and the authority was directed to pass a reasoned order within one month after affording a hearing to all interested parties, including the petitioner.Conclusion: The writ petition was disposed of with the direction for the authority to reconsider the appeal on merits. The decision taken by the authority was to be communicated to the petitioner within a week. No costs were imposed, and the allegations in the writ petition were deemed not admitted. An urgent certified copy of the order was to be provided to the parties on request.