1970 (1) TMI 75 - HC - VAT and Sales Tax

Issues Involved:
1. Applicability of Section 14 of the Limitation Act to the period for filing revisions.
2. Whether the applications before the appellate authority were a "civil proceeding."
3. Whether the appellate authority was a "court."
4. Extension of the principle underlying Section 14(2) of the Limitation Act.
5. Application of Section 29(2) of the Limitation Act to the U.P. Sales Tax Act.

Detailed Analysis:

1. Applicability of Section 14 of the Limitation Act to the period for filing revisions:
The core legal question referred to the court was whether Section 14 of the Limitation Act extended the period for filing revisions by the time during which the restoration applications remained pending as being prosecuted bona fide. The respondent had filed revisions beyond the maximum period prescribed under Section 10 of the U.P. Sales Tax Act. The Judge (Revisions) Sales Tax applied Section 14 of the Limitation Act, excluding the period during which the respondent prosecuted the applications for readmission of the appeals, finding the respondent's actions bona fide.

2. Whether the applications before the appellate authority were a "civil proceeding":
The term "civil proceeding" is not defined in the Limitation Act but is used in contrast to criminal proceedings. The court held that the appeals filed by the respondent to challenge the tax assessments constituted a civil proceeding as they sought relief against the enforcement of a taxation statute, which directly affects the civil rights of the taxpayer. The applications for readmission of the appeals were thus considered to partake the nature of an appeal and were deemed a civil proceeding.

3. Whether the appellate authority was a "court":
The court examined whether the appellate authority and the Judge (Revisions) functioned as a "court" under the Act. Although these authorities functioned in a judicial manner and had some powers similar to those of a court, they were not courts in the strict sense. Judicial opinion was divided on this issue, but the court concluded that the appellate and revising authorities under the Sales Tax Act were not courts in the strict sense. They were administrative tribunals acting quasi-judicially, primarily fiscal in nature, and thus not courts within the meaning of Section 14(2) of the Limitation Act.

4. Extension of the principle underlying Section 14(2) of the Limitation Act:
Despite the authorities not being courts in the strict sense, the court considered whether the principle underlying Section 14(2) should apply. The Privy Council had extended the principle of Section 14 to proceedings before an arbitrator. The court found no reason why this principle should not be extended to the present cases. The real issue was whether the time spent in prosecuting the application for setting aside the dismissal of appeals in default could be excluded in computing the period of limitation for filing a revision. The court reframed the question to address this issue comprehensively.

5. Application of Section 29(2) of the Limitation Act to the U.P. Sales Tax Act:
Section 29(2) of the Limitation Act makes provisions of the Limitation Act applicable to special or local laws unless expressly excluded. The U.P. Sales Tax Act, being a special law, did not expressly exclude the application of Section 14. The court held that Section 29(2) attracted the application of Section 14 to the U.P. Sales Tax Act. The court concluded that the period spent in prosecuting the application for setting aside the dismissal of appeals in default could be excluded from computing the period of limitation for filing the revision by applying the principle underlying Section 14(2) of the Limitation Act.

Separate Judgments:
- Dwivedi, J.: Concluded that the principle underlying Section 14(2) of the Limitation Act should apply to the period spent in prosecuting the application for setting aside the dismissal of appeals in default.
- Singh, J.: Agreed with Dwivedi, J., but added that the answer could also be given in the affirmative with the aid of Section 29(2) of the Limitation Act without reframing the question.
- Swarup, J.: Dissented, holding that the Judge (Revisions) Sales Tax was not a court and that neither Section 14 nor its principle could apply. He emphasized that the Limitation Act did not apply to proceedings before the Judge (Revisions) Sales Tax.

Conclusion:
In accordance with the majority opinion, the court answered that the time spent in prosecuting the application for setting aside the dismissal of appeals in default could be excluded from computing the period of limitation for filing the revision by applying the principle underlying Section 14(2) of the Limitation Act. No order as to costs was made, and counsel's fee was fixed at Rs. 200.

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