2009 (9) TMI 907 - HC - VAT and Sales Tax

Reassessment notice - condonation of delay - Held that - The petitioner is entitled to contest the orders passed in revision on the merits by penalizing the petitioner with cost for its conduct bordering on the negligent. In order to balance the equities we feel that delay should be condoned only with exemplary cost. In the facts of this case we are of the opinion that cost of Rs. 1 lakh (Rs. 50, 000 for each application) be imposed. In these circumstances the writ petition is allowed. Rule is made absolute. Orders dated December 8 2005 passed by the Tribunal are set aside.

Issues Involved:
1. Transfer of assessment files and reassessment orders
2. Issuance of fresh show-cause notices and suo motu revision orders
3. Delay in filing appeals and applications for condonation of delay
4. Knowledge and receipt of certified copies of revision orders
5. Tribunal's refusal to condone delay and dismissal of appeals
6. Petitioner's plea of litigation and labour unrest affecting timely filing
7. Legal principles for condonation of delay

Detailed Analysis:

1. Transfer of Assessment Files and Reassessment Orders:
The Commissioner of Sales Tax directed the transfer of the petitioner's files to the Assistant Commissioner for reassessment under section 24 and penalty proceedings under section 56 of the Delhi Sales Tax Act, 1975. The Assistant Commissioner issued reassessment notices for the years 1991-92 and 1992-93, to which the petitioner responded.

2. Issuance of Fresh Show-Cause Notices and Suo Motu Revision Orders:
Without completing the reassessment proceedings, fresh show-cause notices were issued for suo motu revision of the original assessment orders under section 46 of the local Act. Revision orders were passed, creating significant demands for the years 1991-92 and 1992-93.

3. Delay in Filing Appeals and Applications for Condonation of Delay:
The petitioner did not receive copies of the revision orders and requested certified copies from the Department. The appeals were filed after receiving the certified copies, but the Tribunal dismissed the applications for condonation of delay, citing insufficient cause.

4. Knowledge and Receipt of Certified Copies of Revision Orders:
The Tribunal found that certified copies of the revision orders were collected by the petitioner's Junior Accounts Executive, Sh. S.K. Goel, on July 31, 2000. The petitioner claimed ignorance of this fact until the Department presented the acknowledgment during the hearing.

5. Tribunal's Refusal to Condon Delay and Dismissal of Appeals:
The Tribunal dismissed the applications for condonation of delay based on the receipt of certified copies by Sh. Goel and the petitioner's failure to take action against him. The Tribunal also noted the petitioner's shifting stands regarding the reasons for the delay.

6. Petitioner's Plea of Litigation and Labour Unrest Affecting Timely Filing:
The petitioner argued that ongoing litigation and labour unrest prevented access to the premises and knowledge of the revision orders. The petitioner cited various legal proceedings, including winding up petitions and Supreme Court orders, as reasons for the delay.

7. Legal Principles for Condonation of Delay:
The court emphasized the need for a liberal approach in condoning delays to advance substantial justice. It cited Supreme Court judgments highlighting that delay should not be presumed to be deliberate or due to negligence. The court acknowledged some negligence on the petitioner's part but found it not serious enough to warrant dismissal of the applications for condonation of delay. The court imposed exemplary costs of Rs. 1 lakh on the petitioner and directed the Tribunal to hear and decide the appeals on the merits expeditiously.

Conclusion:
The court allowed the writ petition, set aside the Tribunal's order dated October 31, 2007, and condoned the delay in filing the appeals subject to payment of costs. The Tribunal was directed to hear and decide the appeals on the merits. The review petition clarified that the order dated October 31, 2007, was set aside, not the order dated December 8, 2005.

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