TaxTMI 
TaxTMI 
2020 (5) TMI 149
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....y of appeal against that order stood foreclosed by the law of limitation? 3. The respondent is a registered dealer on the rolls of Assistant Commissioner of Commercial Taxes, Large Tax Payer Unit at Kakinada Division- For short, "the Assistant Commissioner" under the provisions of Andhra Pradesh Value Added Tax Act, 2005- For short, "the 2005 Act" and the Central Sales Tax Act, 1956- For short, "the 1956 Act" and is engaged in the business of manufacturing and sale of Horlicks, Boost, Biscuits, Ghee, Ayurvedic Medicines etc. The Assistant Commissioner had called upon the respondent to produce books of accounts for the assessment year 2013­14 for finalisation of assessment under the 1956 Act. The authorised representative of the respondent produced declaration in Form "F" in support of its claim that certain transactions are inter­ State transfers. The information and declaration furnished by the respondent was duly verified and after giving personal hearing to the respondent, final assessment order came to be passed by the Assistant Commissioner on 21.6.2017, raising demand of Rs. 76,73,197/­ (Rupees seventy six lakhs seventy three thousand one hundred ninety seven o....
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....ppellate Deputy Commissioner, rejecting the statutory appeal preferred by the respondent against the assessment order dated 21.6.2017, for reasons best known to the respondent. The Division Bench of the High Court, on 8.11.2018, noted that the respondent had already paid 12.5% of the disputed tax, for the purpose of filing an appeal. It also noted the stand taken by the respondent that the employee who was in charge of the tax matters of the respondent, had defaulted and was subsequently suspended in contemplation of disciplinary proceedings, as a result of which statutory appeal could not be filed within the prescribed time. The Division Bench of the High Court directed the respondent to pay an additional amount equivalent to 12.5% of the disputed tax within one week and posted the matter for 19.11.2018. This was an ex­parte order. The respondent, in terms of the stated order, deposited an additional amount equivalent to 12.5% of the disputed tax amount. The writ petition was then taken up for hearing on 19.11.2018, when after hearing the counsel for the parties, the writ petition came to be allowed and the order passed by the Assistant Commissioner, dated 21.6.2017 has been q....
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....at the appellate authority may within a further period of thirty days admit the appeal preferred after a period of thirty days if he is satisfied that the VAT dealer or TOT dealer or any other dealer had sufficient cause for not preferring the appeal within that period: Provided further that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces the proof of payment of tax, penalty, interest or any other amount admitted to be due, or of such instalments as have been granted, and the proof of payment of twelve and half percent of the difference of the tax, penalty, interest or any other amount, assessed by the authority prescribed and the tax, penalty, interest or any other amount admitted by the appellant, for the relevant tax period, in respect of which the appeal is preferred. (2) The appeal shall be in such form, and verified in such manner, as may be prescribed and shall be accompanied by a fee which shall not be less than Rs. 50/­ (Rupees fifty only) but shall not exceed Rs. 1000/­ (Rupees one thousand only) as may be prescribed. (3) (a) Where an appeal is admitted under sub­section (1....
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....two years specified in sub­section (4) for the purpose of passing appeal order under this section. (5) Before passing orders under sub­section (4), the appellate authority may make such enquiry as it deems fit or remand the case to any subordinate officer or authority for an inquiry and report on any specified point or points. (6) Every order passed in appeal under this section shall, subject to the provisions of sections 32, 33, 34 and 35 be final." Going by the text of this provision, it is evident 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 app....
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....urther submit that if the delay in filing the above numbered appeal is not condoned, the Applicant would be put to great injustice and irreparable injury. On the other hand, no prejudice would be caused if the delay is condoned. WHEREFORE, it is prayed that the Ld. Appellate Joint Commissioner (ST) be pleased to allow the application for condonation of delay as prayed for." As stated in the application for condonation of delay in filing the statutory appeal, the respondent caused to file affidavit of Mr. Sreedhar Routh, son of Late Mr. R. Seetha Rama Swamy, who was working as Site Director in the respondent company. In this affidavit, in support of the application for condonation of delay, it is averred thus: ­ "..... That Mr. P. Sriram Murthy, Deputy Manager­Finance, was authorized to handle day to day affairs of sales tax (VAT), service tax and excise. He was also authorized to sign and submit documents with the tax departments, file periodic tax returns and represent the company before concerned tax authorities. that the CST assessment for the period 2013­14 was completed by the Assistant Commissioner (CT) LTU raising demand of ....
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....assessment order. It is further pertinent here to record that after receiving the original assessment order, the appellant­ dealer has filed a request letter before the assessing authority for re­assessment under rule 60 of APVAT Rules, 2005. However, the AA has not considered re­ assessment request, and issued an endorsement dt.11.05.2018, rejecting the re­assessment request. The appellant also filed an appeal on such endorsement. That appeal petition based on endorsement has also not been admitted in this office and rejected vide ADC's orders no. 3470, dt. 17.08.2018. Therefore, cannot be assumed under any circumstances, and by no stretch of imagination that the appellant­dealer was not aware of the service of original assessment orders. Hence, it is to be affirmed that the causes put­forth for delay condonation are not rational and against the facts of the case. It is also relevant here to state that whatever may be circumstances, the delay beyond 60 days could not be condonable in the hands of the appellate authority, therefore, such request prima­facie is not in tune with the provisions of the Act, hence, liable to be rejected. Fro....
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.... of the assessment order dated 21.6.2017, presumably, in light of the decision of Full bench of the same High Court in Electronics Corporation of India Ltd. vs. Union of India & Ors. 2018 (361) ELT 22(A.P.). 9. We may advert to the assertions made in the writ petition (on the basis of which the High Court was pleased to grant relief to the respondent), to explain the delay in filing of the statutory appeal including the reason why the respondent should be given one opportunity. The same read thus: ­ "..... 7. From the above, it can be summarized that the total disputed demand has arisen on account of two reasons. Firstly, the 1st Respondent has considered the total branch transfer turnover as per monthly CST returns and ignored the revised turnover as per VAT 200­B. Even though, the such revised stock transfer value was considered by the 1st Respondent while computing the ITC credit as per rule 20 (8) of AP VAT act. Secondly, receipt of excess forms on account of inclusion of value of freebies, free samples etc. by receiving state while issuing the F Forms. The 1st Respondent treated these excess F Forms value as concealment by the petitioner and levied....
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....r turnover as Rs. 863,33,95,259/­. In the said representation, it was contended that the turnover of Rs. 1,85,03,360/­, could not have been levied with the tax since it is admittedly covered by 'F' forms. 12. The representation of the Petitioner under Rule 60 was rejected by the 1st Respondent, by endorsement, dated 11.5.2018 (Ex. P­5) on the ground, that it is not a case for considering it as a mistake rectifiable under Rule 60. It is also submitted that Mr. P. Sri Ram Murthy appear to have filed an appeal against the endorsement of the 1st Respondent dated 11.5.2018 to 2nd Respondent on 28.5.2018. This was also without knowledge of the petitioner's management. 13. It is submitted that the Petitioner was not aware of these developments till the misdeeds of Mr. P. Sri Ram Murthy were being enquired into. It is submitted that Mr. P. Sri Ram Murthy has in fact, remitted an amount of Rs. 9,59,150/­ being 12.5% of the disputed tax in the assessment order online, on 12.9.2017 (Ex. P­6). The payment was made as if it is towards miscellaneous tax payment for June, 2014. When the Petitioner was seeking to reconcile as to how this amount was deposited a....
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....x 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. The High Court was also impressed by the contention pressed into service by the respondent that it ought to be given one opportunity to explain to the authority (Assistant Commissioner) about the discrepancies between the value reported in the CST returns and the amount indicated in Form "F" relating to the turnover. The additional reason as can be discerned from the impugned order is that the respondent had already deposited an additional amount equivalent to 12.5% of the disputed tax amount in terms of the earlier order. We deem it apposite to reproduce the impugned order of the High Court. The same reads thus: ­ "..... The impugned order of assessment is dated 21.6.2017. As against the said order the petitioner filed an appeal with a delay. Since the delay was beyond the period after which it can be condoned, the same was not entertained. Therefore, the petitioner has come up with the above writ petition. The reason....
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....drop of these facts, the central question is: whether the High Court ought to have entertained the writ petition filed by the respondent? 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 (see Baburam Prakash Chandra Maheshwari vs. Antarim Zila Parishad now Zila Parishad, Muzaffarnagar AIR 1969 SC 556 and also Nivedita Sharma vs. Cellular Operators Association of India & Ors. (2011) 14 SCC 337). In Thansingh Nathmal & Ors. vs. Superintendent of Taxes, Dhubri & Ors. AIR 1964 SC 1419, the Constitution Bench of this Court made it amply clear that although the power of the High Court under Article 226 of the Constitution is very wide, the Court must exercise selfimposed restraint and not entertain the writ petition, if an alternative effec....
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.... (emphasis supplied) We may usefully refer to the exposition of this Court in Titaghur Paper Mills Co. Ltd. & Anr. Vs. State of Orissa & Ors. (1983) 2 SCC 433, wherein it is observed that where a right or liability is created by a statute, which gives a special remedy for enforcing it, the remedy provided by that statute must only be availed of. In paragraph 11, the Court observed thus: ­ "11. Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the Prescribed Authority under sub­section (1) of Section 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub­section (3) of Section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under Section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a pet....
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....r Article 142 of the Constitution. Article 142 is a conglomeration and repository of the entire judicial powers under the Constitution, to do complete justice to the parties. Even while exercising that power, this Court is required to bear in mind the legislative intent and not to render the statutory provision otiose. in a recent decision of a three­judge bench of this court in oil and natural gas corporation limited vs. gujarat energy transmission Corporation Limited & Ors. (2017) 5 SCC 42, the statutory appeal filed before this Court was barred by 71 days and the maximum time limit for condoning the delay in terms of Section 125 of the Electricity Act, 2003 was only 60 days. In other words, the appeal was presented beyond the condonable period of 60 days. As a result, this Court could not have condoned the delay of 71 days. Notably, while admitting the appeal, the Court had condoned the delay in filing the appeal. However, at the final hearing of the appeal, an objection regarding appeal being barred by limitation was allowed to be raised being a jurisdictional issue and while dealing with the said objection, the Court referred to the decisions in Singh Enterprises vs. Commi....
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.... made by this Court which is inconsistent with the fundamental rights guaranteed by Part III of the Constitution. It was emphasised that an order which this Court could make in order to do complete justice between the parties, must not only be consistent with the fundamental rights guaranteed by the Constitution, but it cannot even be inconsistent with the substantive provisions of the relevant statutory laws. The court therefore, held that it was not possible to hold that Article 142(1) conferred upon this Court powers which could contravene the provisions of Article 32." (emphasis in original) 13. The said decision has been clarified by a Constitution Bench in Union Carbide Corpn. v. Union of India, (1991) 4 SCC 584, wherein M.N. Venkatachaliah, J. (as his Lordship then was) speaking for the majority, ruled that: (SCC pp. 634­35, para 83) "83. It is necessary to set at rest certain misconceptions in the arguments touching the scope of the powers of this Court under Article 142(1) of the Constitution. These issues are matters of serious public importance. The proposition that a provision in any ordinary law irrespective of the importance of the public poli....
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....needs of "complete justice" of a cause or matter, the Apex Court will take note of the express prohibitions in any substantive statutory provision based on some fundamental principles of public policy and regulate the exercise of its power and discretion accordingly. The proposition does not relate to the powers of the Court under Article 142, but only to what is or is not "complete justice" of a cause or matter and in the ultimate analysis of the propriety of the exercise of the power. No question of lack of jurisdiction or of nullity can arise." (emphasis in original) 14. In this regard, another Constitution Bench in Supreme Court Bar Assn. v. Union of India, (1998) 4 SCC 409] opined: (SCC pp. 437­38, para 56) "56. As a matter of fact, the observations on which emphasis has been placed by us from the Union Carbide case [Union Carbide Corpn. v. Union of India, (1991) 4 SCC 584], A.R. Antulay case [A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602] and Delhi Judicial Service Assn. v. State of Gujarat, (1991) 4 SCC 406, go to show that they do not strictly speaking come into any conflict with the observations of the majority made in Prem Chand Garg case [Prem Cha....
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....d regard being had to its mandatory nature. To put it in a different way, the prescription of limitation in a case of present nature, when the statute commands that this Court may condone the further delay not beyond 60 days, it would come within the ambit and sweep of the provisions and policy of legislation. It is equivalent to Section 3 of the Limitation Act. Therefore, it is uncondonable and it cannot be condoned taking recourse to Article 142 of the Constitution. 16. We had stated earlier that we will be adverting to the passage in Suryachakra Power Corpn. Ltd. v. Electricity Deptt., (2016) 16 SCC 152. There, the Court had referred to Section 14 of the Limitation Act. It fundamentally relied on M.P. Steel Corpn. v. CCE, (2015) 7 SCC 58, wherein the Court after referring to certain authorities, analysed thus: (M.P. Steel Corpn. Case), SCC p. 91, para 43) "43. ... when a certain period is excluded by applying the principles contained in Section 14, there is no delay to be attributed to the appellant and the limitation period provided by the statute concerned continues to be the stated period and not more than the stated period. We conclude, therefore, that the ....
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....alternative efficacious remedy is available and that be invoked by the writ petitioner. However, if the writ petitioner choses to approach the High Court after expiry of the maximum limitation period of 60 days prescribed under Section 31 of the 2005 Act, the High Court cannot disregard the statutory period for redressal of the grievance and entertain the writ petition of such a party as a matter of course. Doing so would be in the teeth of the principle underlying the dictum of a three­Judge Bench of this Court in Oil And Natural Gas Corporation Limited (supra). In other words, the fact that the High Court has wide powers, does not mean that it would issue a writ which may be inconsistent with the legislative intent regarding the dispensation explicitly prescribed under Section 31 of the 2005 Act. That would render the legislative scheme and intention behind the stated provision otiose. 16. The respondent had relied on the decision of this Court in K.s. Rashid & son vs. The income tax investigation commission AIR 1954 SC 207. This decision of the Constitution Bench, no doubt, deals with the extent of power of the High Court under Article 226 of the Constitution and the situ....
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....etition and so did not file an appeal. In the circumstances of the case, we are of the opinion that the ends of justice will be met if we permit the petitioner to file a belated appeal within one month from today with an application for condonation of delay, whereon the appeal may be entertained. Learned counsel for the Revenue has stated before us that the Revenue will not object to the entertainment of the appeal on the ground that it is barred by time. In view of this direction and concession, the petitioner will have an effective alternative remedy by way of an appeal. (emphasis supplied) In that case, it appears that the writ petition was filed within statutory period and legal remedy was being pursued in good faith by the assessee (appellant). 18. Suffice it to observe that this decision is on the facts of that case and cannot be cited as a precedent in support of an argument that the High Court is free to entertain the writ petition assailing the assessment order even if filed beyond the statutory period of maximum 60 days in filing appeal. The remedy of appeal is creature of statute. If the appeal is presented by the assessee beyond the extended statutory lim....
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....ause set out by the respondent and concludes that the same was unsubstantiated by the respondent. That finding has not been examined by the High Court in the impugned judgment and order at all, but the High Court was more impressed by the fact that the respondent was in a position to offer some explanation about the discrepancies in respect of the volume of turnover and that the respondent had already deposited 12.5% of the additional amount in terms of the previous order passed by it. That reason can have no bearing on the justification for non­filing of the appeal within the statutory period. Notably, the respondent had relied on the affidavit of the Site Director and no affidavit of the concerned employee (P. Sriram Murthy, Deputy Manager­Finance) or at least the other employee [Siddhant Belgaonker, Senior Manager (Finance)], who was associated with the erring employee during the relevant period, has been filed in support of the stand taken in the application for condonation of delay. 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. B....