2022 (3) TMI 185 - HC - VAT and Sales Tax

Condonation of delay of approximately 3 years and 7 months in filing the Second Appeal - appeal barred by time limitation or not - denial of input tax credit - HELD THAT - There is no escape to the fact that there is a delay of approximately 3 years and 7 months in filing the Second Appeal before the Tribunal against the order under challenge dated 12.10.2015 passed by the First Appellate Authority confirming the assessment order. It is required to be noted that the assessment orders have been passed for A.Y. 2010-11 to 2013-14, whereby the assessment order was passed by VAT Authority on 11.03.2015. At this juncture, it is also required to be noted that the proceedings under Section 14 of the SARFAESI Act of taking over the possession of the premise of the appellant assessee at Bharuch came to be passed by the competent Authority on 24.02.2015. Thus, it can safely be presumed that since 24.02.2015, the possession of the premise of the appellant assessee was taken over by the lending bank. This Court on perusal of the contents of the letter dated 05.12.2018 produced by the appellant assessee finds that the possession and key of the aforesaid property was handed over to the authorized person of the assessee Company after 30.11.2018 - Further, it transpires from the record that as soon as the assessee Company became aware about the order dated 12.10.2015, necessary steps were undertaken by the assessee Company by filing Second Appeal before the Tribunal on 27.11.2018, whereby the appellate assessee had also complied with the provisions of pre-deposit by making payment of amount of ₹ 20 Lakh before the Tribunal. This Court finds no reason to doubt the bona fide of the assessee Company in filing the Second Appeal before the Tribunal after delay. Thus, no presumption can be attached to deliberate inaction of the assessee Company in filing the Second Appeals. There exist sufficient cause to condone the delay - the delay which has occurred in filing the Second Appeal before the Tribunal can be condoned and the appellate assessee should be given an opportunity to submit its case on merits before the Tribunal which will meet with the ends of justice. The delay of approximately 3 years and 7 months which has occurred in filing the Second Appeals before the Tribunal is hereby condoned - It is clarified that all the contentions of the respective parties as may be available in law are hereby kept open and this Court has otherwise not gone into merits of the case - Appeal allowed.

Summary

Issues Involved:
1. Whether the Tribunal erred in dismissing the appeal as barred by limitation.
2. Whether the delay in filing the Second Appeal should be condoned.

Issue-wise Detailed Analysis:

1. Whether the Tribunal erred in dismissing the appeal as barred by limitation:

The appellant, a registered dealer under the Gujarat Value Added Tax Act, 2003, challenged the Tribunal's order dated 06.07.2021, which dismissed their appeal as time-barred. The appellant's premises were taken over by a lending bank under the SARFAESI Act on 24.02.2015. Subsequently, an ex-parte assessment order dated 11.03.2015 denied the appellant's total input tax claim for the A.Y. 2010-11. The appellant's first appeal was dismissed on 12.10.2015 due to non-payment of the pre-deposit amount. The appellant claimed unawareness of the ex-parte order until they received a demand notice in 2018. They filed a second appeal on 16.08.2019 after paying the pre-deposit. The Tribunal, however, rejected the appeal, construing a letter dated 25.07.2019 as an admission of service of the order dated 12.10.2015.

2. Whether the delay in filing the Second Appeal should be condoned:

The appellant argued that the delay was not due to any deliberate tactics or inaction but due to the possession of their premises by the bank. They provided documents, including a letter dated 05.12.2018 from the Bank of India, indicating that the premises were returned to them after 30.11.2018. The appellant contended that the order dated 12.10.2015 was served at an address under the bank's possession, and they only became aware of it in 2018. The respondent argued that the appellant was negligent and should have followed the litigation more scrupulously.

Court's Findings:

The Court found that the appellant's premises were indeed under the bank's possession since 24.02.2015, and the order dated 12.10.2015 was served at the premises during this period. The Court noted that the appellant took prompt steps upon becoming aware of the order, including filing the second appeal and making the required pre-deposit. The Court did not find any deliberate inaction or lack of bona fide on the appellant's part and concluded that there was sufficient cause to condone the delay.

Conclusion:

The Court quashed and set aside the Tribunal's order dated 06.07.2021, condoned the delay of approximately 3 years and 7 months, and directed the Tribunal to register and hear the second appeals on merits. The Court clarified that it did not address the merits of the case, leaving all contentions open for the Tribunal to decide in accordance with the law. The appeals were allowed to the extent of condoning the delay and directing a merit-based hearing by the Tribunal.