2016 (10) TMI 1000 - HC - VAT and Sales Tax

Demand and recovery of tax after 1485 days - validity of assessment orders - the assessment for the years from 1983-84 to 1996-97 were framed by the assessing authority by passing orders on different dates in April, 2002 - limitation bar u/s 11 (4) of the Act - Held that - the decision in the case of State of Punjab and others vs. Patiala Cooperative Sugar Mills Limited, Rakhra, District Patiala 2015 (9) TMI 1327 - PUNJAB AND HARYANA HIGH COURT relied upon where it was held that assessments upto the years 1997-98 could not validly be passed after April, 2001 - all assessment orders barred by limitation. Condonation of delay not considered as will be a futile exercise to conduct another round of litigation as the matter is already decided on merits - appeal of state dismissed - tax cannot be recovered after 5 years - decided against Revenue.

Issues Involved:
1. Whether the order of the tribunal annexure 'A-6' is a Non-Speaking order.
2. Whether the Department has explained the delay by a 'sufficient cause' and shown due diligence in pursuing the remedy.
3. Whether the decision of the Tribunal in K. Ajesh and Company could form a 'sufficient cause' for condonation of delay.
4. Whether the prejudice caused to the dealer by condonation of such a long delay was considered.
5. Whether the tribunal should have considered the dealer's objection against condoning the delay.
6. Whether a delay of 1485 days is considered a long delay.
7. Whether the department had been diligent in pursuing the remedy and whether the delay should be condoned.
8. Whether the tribunal is justified in granting a special status to the State for condoning such a long delay.

Detailed Analysis:

1. Non-Speaking Order:
The appellants contended that the tribunal's order annexure 'A-6' was a non-speaking order. The court did not explicitly address this issue in detail, focusing instead on the broader context of the appeals and the merits of the case.

2. Explanation of Delay and Due Diligence:
The appellants argued that the Department had not shown 'sufficient cause' for the delay of 1485 days in filing the appeals. They highlighted that the delay was due to the Department's lack of diligence. The court noted the State's reliance on precedents like State of Nagaland vs. Lipok Ao and others, emphasizing that 'sufficient cause' should be liberally construed for State machinery. However, the court concluded that the delay was excessive and not adequately justified by the Department.

3. Decision in K. Ajesh and Company:
The appellants questioned whether the decision in K. Ajesh and Company, which was under challenge, could form a 'sufficient cause' for condonation of delay. The court did not delve deeply into this issue, instead focusing on the broader question of whether the delay was justified and whether the assessment orders were time-barred.

4. Prejudice to the Dealer:
The appellants argued that the tribunal failed to consider the prejudice caused to the dealer by condoning such a long delay. The court acknowledged this concern but ultimately focused on the merits of the case, determining that the assessment orders were time-barred and thus invalid.

5. Consideration of Dealer's Objection:
The appellants contended that the tribunal should have considered their objection against condoning the delay. The court did not explicitly address this procedural issue, instead resolving the case based on the substantive merits.

6. Length of Delay:
The court recognized that a delay of 1485 days is indeed a long delay. The appellants argued that such a delay could not be condoned without a compelling justification, which the Department failed to provide.

7. Department's Diligence:
The appellants highlighted the Department's lack of diligence, noting that the sanction for revision was given in December 2006, but the appeals were filed only on 26.11.2007. The court agreed that the Department had not been diligent in pursuing the remedy, further supporting the decision to reject the condonation of delay.

8. Special Status to State:
The appellants argued that the tribunal unjustifiably granted a special status to the State for condoning the delay. The court concluded that even if the appeals were considered on merits, the assessment orders were time-barred and could not be sustained, thus negating the need to address the issue of special status.

Conclusion:
The court concluded that remitting the matters back to the tribunal would be futile, as the assessment orders were clearly barred by limitation as per the judgment in Patiala Cooperative Sugar Mills Limited's case. The court upheld the orders of the Deputy Excise and Taxation Commissioner (Appeals) and dismissed the appeals filed by the State before the tribunal on merits, without delving into the issue of delay. The appeals were disposed of accordingly.

← Previous Next →