2018 (5) TMI 1033 - HC - VAT and Sales Tax

Condonation of delay of 444 days in filing Tax Appeal - satisfactory explanation for the delay - whether the delay can be condoned or not? Held that - the reasons cited for preferring the appeal after delay mainly raised on two grounds. First is that the administrative clearances and decisions take sometime - the delay is properly explained. It is true that there was a clear error on part of the Government Pleader s Office in not taking prompt steps for drafting and filing the Tax Appeal. However, Government Pleader s Office owned up this mistake. It is stated that after receiving the papers on 13.07.2016, the same were misplaced. When this came to light, the VAT department was contacted in March 2017 for supplying second set of papers. Government Pleader s office received such papers on 29.06.2017. Tax Appeal was drafted and sent to VAT Department on 12.07.2017 and the appeal was filed on 09.08.2017. This is therefore not a case where long stretch of delay had remained totally unexplained - Considering the explanation rendered for the delay caused in filing appeal and the tax implications involved, we are inclined to condone the delay. Of course, upon the cost being paid to the respondent. Identical issue decided in the case of STATE OF GUJARAT Versus WELSPUN GUJARAT STAHL ROHREN LTD. 2013 (3) TMI 626 - GUJARAT HIGH COURT , where it was held that explanation in the form of administrative clearances and consumption of time in the office of the Government Pleader in preferring the appeals are pressed in service for explaining the delay. Further, the duty amount involved in the appeal is also substantially large. Considering these aspects of the matter, delay is condoned by awarding cost of ₹ 15,000/-, which shall be paid to the respondent within four weeks from today. Delay condoned with cost - COD application allowed.

Summary

Issues Involved:
1. Condonation of delay in filing Tax Appeal.
2. Explanation for the delay.
3. Comparison with previous judgments on similar issues.
4. Consideration of public interest and substantial justice.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing Tax Appeal:
The State Government filed an application seeking condonation of a 444-day delay in filing a Tax Appeal against the Value Added Tax Tribunal's judgment dated 24.02.2016. The tax implications involved exceed ?9 crores.

2. Explanation for the Delay:
The delay was attributed to the administrative procedures required for filing the appeal. The certified copy of the Tribunal's order was received on 23.03.2016. Several steps were taken, including seeking opinions from various officers, obtaining government approval, and addressing queries from the legal department. The necessary documents were supplied to the Government Pleader's office on 13.07.2016. However, the papers were misplaced, causing further delay. The issue was identified in March 2017, and a second set of papers was provided on 29.06.2017. The Tax Appeal was drafted and forwarded to the VAT Department on 12.07.2017, and subsequently filed in the High Court on 09.08.2017.

3. Comparison with Previous Judgments on Similar Issues:
The respondent's counsel relied on two judgments where delays were not condoned. In the case of State of Gujarat vs. Pipavav Defence, the delay was 549 days, and the explanation was deemed insufficient as it lacked detailed steps taken during the delay period. In another case, State of Gujarat vs. Shree Ashok Saw Mill and Wood Works, a delay of 1226 days was not condoned due to the general nature of the explanation.

Conversely, the applicant's counsel cited cases where delays were condoned. In State of Gujarat vs. Mohit Industries Ltd, a similar explanation was accepted. In State of Gujarat v. Welspun Gujarat Stahl Rohren Ltd, the court condoned the delay considering the tax impact and the explanation provided. The Supreme Court in Commissioner of Income-Tax V. West Bengal Infrastructure Development Finance Corporation Ltd emphasized deciding cases on merits when substantial tax amounts are involved, even if there is a delay.

4. Consideration of Public Interest and Substantial Justice:
The court recognized that government decisions are often slow due to procedural red-tape. The explanation provided by the State was deemed satisfactory, considering the tax implications and the absence of malafide intentions. The court highlighted that dismissing the appeal on technical grounds would not serve public interest or substantial justice.

Conclusion:
The court condoned the delay, emphasizing that the explanation was sufficient, and substantial tax implications warranted a decision on merits. The delay was condoned with a cost of ?25,000 to be paid to the respondent by 30.04.2018. The application was disposed of accordingly.