Delay in tax appeal condoned due to counsel's illness and short notice; appellate dismissal set aside with costs

HC considered a petition challenging dismissal of a tax appeal as time-barred. The appellate authority had refused condonation of delay, citing lack of power, where delay was explained by petitioner's counsel's illness after receiving documents. HC noted an infraction of natural justice since only one day's notice was given before the impugned order and accepted the reasons for delay. HC held that, notwithstanding the appellate authority's lack of power, the delay would be condoned subject to costs of Rs. 20,000, set aside the dismissal order, and directed the appeal be heard on merits.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the dismissal of the appeal by the Appellate Authority as barred by limitation, without condoning the delay, was sustainable in view of the reasons furnished for delay and the procedure followed in granting personal hearing.

1.2 Whether the issuance of notices of personal hearing with only one day's notice amounted to violation of the principles of natural justice warranting intervention under Article 226.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Sustainability of dismissal of appeal as time-barred and power to condone delay

Interpretation and reasoning

2.1 The Court noted that an application for condonation of delay was filed before the Appellate Authority, specifically stating that the delay occurred because the advocate, to whom documents had been handed over, fell sick and could not prepare the appeal in time, and offering to produce medical documents at the time of personal hearing.

2.2 The Court recorded that, in terms of a prior decision, the Appellate Authority does not possess the power to condone delay beyond the statutory period, thereby explaining why the Appellate Authority declined to entertain the time-barred appeal.

2.3 However, exercising jurisdiction under Article 226, the Court examined the overall circumstances, including the reasons cited for delay and the manner in which the personal hearing was scheduled, and considered whether equity and fairness required intervention despite the absence of statutory power with the Appellate Authority to condone delay.

Conclusions

2.4 The Court held that, notwithstanding the lack of power with the Appellate Authority to condone delay, the Court itself, in exercise of writ jurisdiction, was justified in condoning the delay in filing the appeal, in view of the reasons placed on record and the attendant circumstances.

2.5 The delay in filing the appeal was condoned subject to the condition that costs of Rs. 20,000/- be deposited with the specified association within two weeks.

2.6 The impugned order dismissing the appeal on the ground of delay was set aside and the appeal was directed to be heard on merits.

Issue 2: Adequacy of notice for personal hearing and compliance with principles of natural justice

Interpretation and reasoning

3.1 The Court noted that a notice of personal hearing was issued on 20th August 2025 fixing the hearing on 21st August 2025, thereby affording only one day's notice to the petitioner.

3.2 It was further noted that another notice of personal hearing was issued on 2nd September 2025 fixing the hearing for 3rd September 2025, again with only one day's notice.

3.3 The Court treated the grant of only one day's notice for appearance in personal hearing as an "infraction of principles of natural justice", affecting the petitioner's effective opportunity to be heard.

Conclusions

3.4 The Court held that the issuance of personal hearing notices with merely one day's notice violated the principles of natural justice.

3.5 On this ground, coupled with the reasons given for delay, the Court found sufficient justification to intervene, condone the delay, and set aside the dismissal of the appeal.

3.6 The Court directed that the appeal shall proceed in accordance with law and that a proper hearing with at least one week's notice must be afforded to the petitioner.

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