Tax recovery using extended limitation and penalty in statutory appeal-additional substantial questions must be framed; refusal at admission set aside.

In a statutory appeal, the dominant issue was whether the HC, while admitting the appeal, could refuse to frame additional substantial questions of law on the Revenue's entitlement to invoke the extended limitation period for recovery and on imposition of penalty. The SC held that once the appeal stood admitted and awaited final adjudication, the HC ought to have framed the proposed substantial questions and decided them on merits at the final hearing; declining them at the admission stage with detailed reasons was unnecessary and could prejudice the appellant because substantial questions may interrelate. The impugned portion refusing to frame those questions was set aside and the matter was remitted to the HC to hear the parties by framing both questions.

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Issues involved:
The limited issue in these appeals is the grievance of the appellant-Department regarding the High Court's refusal to permit raising two questions of law concerning the extended period of limitation and imposition of penalty.

Extended period of limitation and imposition of penalty:
The appellant sought to raise additional questions regarding the Tribunal not allowing the extended period of limitation for recovery of dues and penalties imposed by the Adjudicating Authority. The High Court extensively considered these aspects and declined to raise the substantial questions of law at the admission stage, which the appellant contended was premature. The appellant argued that the High Court should have permitted the raising of substantial questions of law first and then considered them on merits during final adjudication to avoid prejudice. Consequently, the portion of the High Court's order declining to raise these substantial questions of law was set aside, and the High Court was directed to hear the parties on these issues and dispose of the appeals accordingly.

Final Decision:
The appeals were disposed of without expressing any opinion on the merits of the pending appeal before the High Court. The High Court was instructed to raise the substantial questions of law concerning the extended period of limitation and imposition of penalty, consider them on their merits, and decide the appeals in accordance with the law. Additionally, if the parties request an early hearing, the High Court was directed to consider such a request following legal procedures.

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