9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 3 - HC - VAT and Sales TaxCondonation of delay of 445 days in filing appeal - sufficient cause for condonation of delay present or not? - HELD THAT - The law of limitation has been enacted which is based on public policy so as to prescribe time limit for availing legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to destroy the rights of the parties but to see that the uncertainty should not prevail for unlimited period. Under Section 5 of the 1963 Act, the courts are empowered to condone the delay where a party approaching the court belatedly shows sufficient cause for not availing the remedy within the prescribed period. The Apex Court in ORIENTAL AROMA CHEMICAL INDUSTRIES LTD. VERSUS GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION ANR. 2010 (2) TMI 1121 - SUPREME COURT OF INDIA noticed that the courts should adopt liberal approach where delay is of short period whereas the proof required should be strict where the delay is inordinate. There is no ground to condone the colossal delay of 445 days in filing the appeal. The question regarding whether there is sufficient cause or not depends upon each case and primarily is a question of fact to be considered taking into totality of events which had taken place in a particular case - In the present case after appreciating the matter it cannot be said that there was sufficient cause for condonation of delay. Delay cannot be condoned - application for COD dismissed.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Liability to deduct tax on payments made to sub-contractors. 3. Assessment of tax on profit retained by the contractor. 4. Double taxation concerns under Article 366 (29A)(b) of the Constitution of India. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The primary question addressed was whether there was sufficient cause for condonation of a 445-day delay in filing the appeal. The court examined the legal position relating to condonation of delay under Section 5 of the Limitation Act, 1963. The Supreme Court's principles in Oriental Aroma Chemical Industries Ltd. v. Gujarat Industrial Development Corporation and another were referenced, emphasizing that the law of limitation is founded on public policy to ensure timely legal remedies. The courts have the discretion to condone delays if "sufficient cause" is shown, which is an elastic term allowing for a meaningful application of the law. The court noted that the test of "sufficient cause" is individualistic and depends on the facts of each case, as highlighted in R.B. Ramlingam v. R.B. Bhavaneshwari. The appellant's counsel argued that the delay was due to the file being misplaced during examination at the Head Office and subsequent procedural delays. However, the court found the explanation insufficient and the delay unjustified, leading to the dismissal of the application for condonation of delay. 2. Liability to Deduct Tax on Payments Made to Sub-contractors: The appeal raised the issue of whether the contractee is liable to deduct tax from payments made to sub-contractors. The Haryana Value Added Tax Act, 2003, and the Haryana Value Tax Rules, 2003, were interpreted to cast liability on the contractee to deduct tax from payments made to the contractor, not the sub-contractor. The court referenced the Karnataka High Court's decision in Skyline Constructions and Housing Pvt. Ltd. v. Authority for Advance Ruling, which held that the consideration for executing a works contract refers to what the principal contractor receives, not the sub-contractor. The Haryana Tax Tribunal had similarly stated that the contractee's liability to deduct tax on the total valuable consideration paid to the contractor is absolute. 3. Assessment of Tax on Profit Retained by the Contractor: The court examined whether the profit made by the appellant contractor should be taxed as part of the total valuable consideration. The case of DLF Industries Ltd. v. State of Haryana was cited, where it was held that the property transferred in goods by the sub-contractor is to be assessed in the hands of the main contractor. The lower authorities had imposed tax on the difference between the amount received by the contractor from the contractees and the payments made to sub-contractors, which was upheld as correct. 4. Double Taxation Concerns: The appellant argued that charging sales tax on the profit earned by the contractor would result in double taxation, violating Article 366 (29A)(b) of the Constitution of India. However, the court found that there was only one deemed sale from the contractor to the contractee, and the lower authorities had not charged tax on two deemed sales. Thus, the imposition of sales tax on the profit margin was deemed appropriate and not in violation of constitutional principles. Conclusion: The court dismissed the application for condonation of delay due to insufficient cause and upheld the lower authorities' decision to impose tax on the profit retained by the contractor. The appeal was consequently dismissed as time-barred.
|
