1997 (1) TMI 513 - AT - VAT and Sales Tax

Issues:
1. Appeal against orders dated February 20, 1995, and November 29, 1996.
2. Alleged excess quantity of goods seized under section 7(1)(ii)(b) of the Act of 1954.
3. Imposition of penalty under section 7(2) of the Act of 1954.
4. Appeal rejection based on limitation grounds.
5. Lack of notice for showing cause on limitation.
6. Interpretation of the expression "from the date of such order."
7. Appeal filed within the specified period.
8. Decision to set aside the appellate order dated November 29, 1996.
9. Direction for fresh disposal of the appeal on merits.
10. Application allowed without costs.

Analysis:
The application pertains to challenging orders dated February 20, 1995, and November 29, 1996, passed by the Assistant Commissioner of Commercial Taxes and the Deputy Commissioner of Commercial Taxes, respectively. The initial order was based on the alleged excess quantity of goods found during an inspection at the business premises of a partnership firm. The firm, engaged in sales of marble tiles, faced a penalty under section 7(2) of the Act of 1954. An appeal was filed against this penalty order, which was rejected by the Deputy Commissioner on grounds of limitation, without providing a notice for showing cause on the delay in filing the appeal. The applicants contended that the appeal was filed within the specified period, counting from the date of communication of the order, not the date of passing the order. The Tribunal held that the appeal was indeed filed within time, as the penalty order was communicated to the applicants on March 8, 1995, and the appeal was filed on May 3, 1995, within 60 days of communication. Consequently, the appellate order dated November 29, 1996, was set aside, and the matter was directed to be heard on merits by the Deputy Commissioner within twelve weeks.

The contention raised by the applicants regarding the lack of notice for showing cause on the limitation issue was dismissed by the Tribunal. It was held that there is no statutory requirement for such a notice under section 12 of the Act of 1954. The Tribunal emphasized that the statute mandates filing an appeal within a specified period, with the provision for showing cause for an extension of time. The absence of a notice for showing cause on limitation was deemed not to have caused any prejudice or breach of natural justice principles in this case.

The Tribunal delved into the interpretation of the expression "from the date of such order" as mentioned in section 12(1) of the Act of 1954. It was clarified that this expression refers to the date of communication of the order, not the date of passing the order. The literal interpretation of the date of passing the order would be unreasonable and arbitrary, as the party needs to be aggrieved by the order, which necessitates its communication. In this case, the penalty order was communicated to the applicants on March 8, 1995, and the appeal was filed within 60 days of this communication, thereby meeting the statutory requirement.

The Tribunal, therefore, allowed the application based on the interpretation of the expression "the date of such order," without delving into other issues raised in the application. The main application was disposed of without any costs, with a direction for the Deputy Commissioner to hear the appeal on merits within a specified timeframe.

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