1996 (8) TMI 489 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Explanation of the delay due to wrong legal advice.
3. Tribunal's rejection of the explanation for delay.
4. Application of Section 5 of the Limitation Act.
5. Tribunal's hyper-technical approach.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The primary issue was whether the Trade Tax Tribunal erred in refusing to condone the delay in filing the appeal under Section 10 of the U.P. Trade Tax Act, 1948. The Tribunal dismissed the appeal as time-barred, which led to the revision petition.

2. Explanation of the Delay Due to Wrong Legal Advice:
The assessee explained that the delay was due to filing a second review application under wrong legal advice, believing it to be a valid course of action. This second review was filed within a week after the first review was rejected, but the Tribunal did not accept this explanation, stating that no second review application was maintainable in law.

3. Tribunal's Rejection of the Explanation for Delay:
The Tribunal divided the period of delay into four parts and rejected the explanation for each period. Specifically, for the first period, the Tribunal did not accept the explanation of wrong legal advice, questioning the credibility of the affidavit submitted by the assessee and the lack of specific details such as the name of the counsel who provided the advice. The Tribunal also noted the absence of a board resolution from the assessee company authorizing the second review application.

4. Application of Section 5 of the Limitation Act:
Section 5 of the Limitation Act allows for the condonation of delay if "sufficient cause" is shown. The court emphasized that "sufficient cause" is a broad and comprehensive term, dependent on the facts of each case, and courts should adopt a liberal approach to advance substantial justice. The court noted that the Tribunal should not apply an overly stringent standard of diligence and should favor the appellant if the delay is not unreasonable.

5. Tribunal's Hyper-Technical Approach:
The court criticized the Tribunal for its hyper-technical approach and overstrictness. The Tribunal's refusal to condone the delay was seen as unjust, given that the assessee had acted with due diligence and bona fide belief. The court held that the Tribunal failed to consider the totality of circumstances and the substantial justice involved. The court pointed out that the assessee had nothing to gain from the delay and that the Tribunal should have adopted a more justice-oriented approach.

Conclusion:
The court concluded that the Tribunal erred in not condoning the delay. The delay was excusable given the bona fide belief and the diligent pursuit of the case by the assessee. The court set aside the Tribunal's order and condoned the delay, directing the Tribunal to proceed with the appeal on its merits. The revision petition was allowed with no order as to costs.