Non filing appeal within statutory limitation period not a case of violation of fundamental right, much less statutory or legal right -SC
ABCAUS Case Law Citation:
ABCAUS 3306 (2020) (05) SC
Important case law relied upon by the parties:
Electronics Corporation of India Ltd. vs. Union of India & Ors
Oil and Natural Gas Corporation Limited vs. Gujarat Energy Transmission Corporation Limited & Ors
Baburam Prakash Chandra Maheshwari vs. Antarim Zila Parishad
S. Rashid & Son vs. the Income Tax Investigation Commission
Mafatlal Industries Ltd. & Ors.vs. Union of India & Ors
Nivedita Sharma vs. Cellular Operators Association of India & Ors.
Titaghur Paper Mills Co. Ltd. & Anr. Vs. State of Orissa & Ors
Thansingh Nathmal & Ors. vs. Superintendent of Taxes Dhubri & Ors
In this case, the Commercial Tax Officer had challenged the judgment passed by the High Court in a Writ Petition filed by the assessee.
The moot question arsing in this appeal was 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.
The respondent was a registered dealer engaged in the business of manufacturing and sale of various food products etc.
The assessment order was passed by the Assistant Commissioner of Commercial Tax raising a demand on the finding that the assessee had failed to submit Form “F” to the tune of the turnover reported in the Central Sales Tax (CST) return.
Though the assessee paid 12.5% of the disputed tax, for the purpose of filing an appeal, it did not file appeal against the assessment order within the statutory period instead invoking State Value Added Tax Rules filed an application highlighting the error made in raising the demand which was rejected.
Finally, after one and half year, the assessee filed an appeal before the Appellate Deputy Commissioner against the assessment order which was dismissed being barred by limitation and also because no sufficient cause was made out.
The assessee did not challenge the order passed by the Appellate Deputy Commissioner but filed a writ petition before the High Court solely for quashing and setting aside of assessment order being contrary to law, without jurisdiction and in violation of principles of natural justice.
The Division Bench of the High Court noted that the assessee 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 assessee, 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 High Court, on assessee paying an additional amount equivalent to 12.5% of the disputed tax allowed the Writ Petition and quashed the order passed by the Assistant Commissioner and remanded the matter to the Assistant Commissioner for reconsideration afresh after giving personal hearing to the respondent assessee to explain the discrepancies.
Feeling aggrieved by the order of the Hon’ble High Court, the Revenue had filed appeal to the Hon’ble Supreme Court.
It was urged that the assessee having failed to avail of statutory remedy of appeal within the prescribed time and also because the delay in filing appeal had not been satisfactorily explained, the High Court ought not to have entertained the writ petition at the instance of such person and more so, because the respondent had allowed the order passed by the appellate authority rejecting the appeal on the ground of delay to become final.
In substance, the argument was that the High Court exceeded its jurisdiction and committed manifest error in setting aside the assessment order.
The Hon’ble Supreme Court noted that under the State Act the statutory appeal was 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.
It was noted that the before the Appellate Commissioner, in the application for condonation of delay, the assessee had filed an affidavit of a Director stating that the Deputy Manager Finance of the assessee who was handling the case did not inform the company of the assessment order and handled the case at his own. It was also stated that disciplinary proceedings were also initiated against him and he had been suspended.
The Hon’ble Supreme Court observed that the High Court had allowed the Petition on the ground that respondent faced an extraordinary situation due to the act of commission and omission of its employee in charge of the tax matters, forcing the management to suspend him and initiated disciplinary proceedings against him. The High Court was also impressed by the contention that it ought to be given one opportunity to explain the discrepancies between the value reported in the CST returns and the amount indicated in Form “F” relating to the turnover.
Non filing appeal within statutory period not violation of fundamental right
The Hon’ble High Court stated that 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 Court must exercise self imposed restraint and not entertain the writ petition, if an alternative effective remedy is available to the aggrieved person.
The Hon’ble Supreme Court observed the following law pronounced by it in this regard:
(a) 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.
(b) An Act cannot bar and curtail remedy under Article 226 or 32 of the Constitution. The Court, however, added a word of caution and expounded that the constitutional Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment.
The Hon’ble Supreme Court stated that the powers of the High Court under Article 226 of the Constitution are wide, but not wider than the plenary powers bestowed on the Apex Court under 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.
The Hon’ble Supreme Court pointed out that in its recent judgment a submission was canvassed by the assessee that in the similar facts of that case, the Court may exercise its jurisdiction under Article 142 of the Constitution, so that complete justice can be done. However, this argument was considered and plainly rejected. The Court held that when the statute commands that the Supreme Court may condone the further delay not beyond specified days, it would come within the ambit and sweep of the provisions and policy of legislation. It is equivalent to Section 3 of the Act. Therefore, it cannot be condoned taking recourse to Article 142 of the Constitution.
The Hon’ble Supreme Court noted that the appeal was rejected by the appellate authority on the ground that it had no power to condone the delay beyond 30 days, The order did examine the cause set out by the respondent and concluded that the same was unsubstantiated by the respondent. This finding had not been examined by the High Court 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 demand amount in terms of the previous order passed by it. That reason could have no bearing on the justification for non filing of the appeal within the statutory period.
The Hon’ble Supreme Court also noted that no affidavit of the concerned erring employee or at least the other employee associated with the erring employee during the relevant period, had been filed in support of the stand taken in the application for condonation of delay.
Further, the Hon’ble Supreme Court observed that no finding had been recorded by the High Court that it was a case of violation of principles of natural justice or non compliance of statutory requirements in any manner. Since the statutory period for filing of appeal had expired long back, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all.
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