2007 (8) TMI 664 - HC - VAT and Sales Tax

Whether the view taken by the Tribunal was too technical in rejecting the delay condonation application rather than having exercised its discretion in affording hearing on merits instead of shutting it out on technicalities? Held that - Present case relates to imposition of tax. If the dealer is permitted to file second appeal and it is heard on merits it may succeed and may not be liable to pay tax. Such an opportunity should be given to a party who may be entitled to establish that it was not liable to pay any tax. Liability of unlawful tax is not comprehended in law. Thus it will be just and proper that the second appeal of the dealer may be decided on merits. The impugned order of the Tribunal rejecting the delay condonation application is set aside. The delay in filing the second appeal is condoned. The Tribunal is directed to decide the appeal on merit

Summary

Issues: Delay condonation application for second appeal dismissal by Tribunal

Analysis:
The judgment involves the issue of a delay condonation application for the dismissal of a second appeal by the Tribunal. The first appeal of the dealer was decided against them by the Deputy Commissioner (Appeals) for the assessment year 1997-98 (U.P.). The dealer filed a time-barred second appeal on March 14, 2007, beyond the prescribed limit by almost four years. The appeal was accompanied by a condonation of delay application supported by medical evidence of the proprietor's head injury. However, the Tribunal rejected the application and dismissed the appeal on the ground of delay.

The key contention raised in the revision was whether the Tribunal's rejection of the delay condonation application was too technical, depriving the dealer of a hearing on merits. The applicant argued that the delay was justified due to the proprietor's accident and subsequent treatment. They also pointed out discrepancies in the signatures on receiving dates, questioning the service of the first appellate order. The court noted that a pedantic approach should be avoided in condonation of delay matters and emphasized the need to assess whether any benefit was gained by the delay.

The court considered the implications of the case, highlighting that allowing the dealer to file the second appeal and be heard on merits could potentially result in the dealer not being liable to pay tax. The court emphasized the importance of providing an opportunity for a party to establish their non-liability to pay tax, as unlawful tax liability is not recognized in law. Consequently, the court set aside the Tribunal's order, condoned the delay, and directed the Tribunal to decide the appeal on merits. The revision was allowed with no order as to costs.