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TMI Blog2020 (5) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin 30 days from the date on which the order or proceeding was served on the assessee. If the appeal is filed after expiry of prescribed period, the appellate authority is empowered to condone the delay in filing the appeal, only if it is filed within a further period of not exceeding 30 days and sufficient cause for not preferring the appeal within prescribed time is made out. The appellate authority is not empowered to condone delay beyond the aggregate period of 60 days from the date of order or service of proceeding on the assessee, as the case may be. In the present case, admittedly, the appeal was filed way beyond the total 60 days period specified in terms of Section 31 of the 2005 Act. In that, the respondent had filed the appeal accompanied by an application for condonation of delay setting out reasons - The High Court finally allowed the writ petition vide the impugned judgment and order on the ground that the statutory remedy had become ineffective for the respondent (writ petitioner) due to expiry of 60 days from the date of service of the assessment order. Inasmuch as, the appellate authority had no jurisdiction to condone the delay after expiry of 60 days, despi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24.9.2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all. The High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold - Appeal allowed. - A. M. Khanwilkar And Dinesh Maheshwari, JJ. For the Appellant : Mr. G. N. Reddy, AOR For the Respondent : Mr. V. Lakshmikumaran, Adv. Ms. Charanya Lakshmikumaran, AOR Mr. Aaditya Bhattacharya, Adv. Ms. Apeksha Mehta, Adv JUDGMENT A.M. Khanwilkar, J. 1. Leave granted. 2. The moot question in this appeal emanating from the judgment and order dated 19.11.2018 in Writ Petition No. 39418/2018 passed by the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh- For short, the High Court is: whether the High Court in exercise of its writ jurisdiction under Article 226 of the Constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late authority , as the case may be on 28.5.2018, which came to be rejected on 17.8.2018. It is only thereafter, the respondent assessee was advised to file appeal before the Appellate Deputy Commissioner on 24.9.2018 against the assessment order dated 21.6.2017. In the meantime, another assessment order came to be passed on 31.3.2018 in relation to the Audit taken up for the tax period from 1.4.2013 to 31.3.2017. We are not concerned with the said order in the present appeal. 4. Reverting to the appeal filed by the respondent against the assessment order dated 21.6.2017, the same was dismissed on 25.10.2018 being barred by limitation and also because no sufficient cause was made out. The respondent was then advised to file writ petition before the High Court being Writ Petition No. 39418/2018, solely for quashing and setting aside of assessment order dated 21.6.2017 for tax period April, 2013 to March, 2014 (CST) being contrary to law, without jurisdiction and in violation of principles of natural justice to the extent of levy on the Branch Transfer turnovers and to direct the Assistant Commissioner (CT) to re do the assessment and reckon the correct Branch Transfer turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assistant Commissioner. 6. The respondent, on the other hand, would urge that the High Court has had ample power under Article 226 of the Constitution of India to grant relief to the respondent considering the peculiar facts of the present case being an exceptional situation which if not remedied, would result in failure of justice. 7. We have heard Mr. G.N. Reddy, learned counsel for the appellants and Mr. V. Lakshmikumaran, learned counsel for the respondent. 8. From the indisputable facts, it is evident that the assessment order dated 21.6.2017 was challenged by the respondent by way of statutory appeal before the Appellate Deputy Commissioner only on 24.9.2018. Section 31 of the 2005 Act provides for the statutory remedy against an assessment order. The same, as applicable at the relevant time, reads thus: 31. (1) Any VAT dealer or TOT dealer or any other dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed or proceeding recorded by an Additional Commissioner or Joint Commissioner or Deputy Commissioner, may within thirty days from the date on which the order or proceeding w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such Tribunal, only in case where the Additional Commissioner or the Joint Commissioner on an application made to him by the dealer in the prescribed manner, makes specific order to that effect. (4) The appellate authority may, within a period of two years from the date of admission of such appeal, after giving the appellant an opportunity of being heard and subject to such rules as may be prescribed: (a) confirm, reduce, enhance or annul the assessment or the penalty, or both; or (b) set aside the assessment or penalty, or both, and direct the authority prescribed to pass a fresh order after such further enquiry as may be directed; or (c) pass such other orders as it may think fit. (4A) Where any proceeding under this section has been deferred on account of any stay orders granted by the High Court or Supreme Court in any case or by reason of the fact that an appeal or other proceeding is pending before the High Court or the Supreme Court involving a question of law having a direct bearing on the order or proceeding in question, the period during which the stay order is in force or the period during which such appeal or proceeding is pending, shall be exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng certain irregularities for past more than 12 months and initiated disciplinary proceedings against him. He has been suspended from his official duties with effect from 26th July 2018. 6. It is only post his suspension that the Applicant came to know about the receipt of impugned order. Also, the Appellant has come to know that Mr. Murthy paid the 12.5% of the demand amount on 12.09.2017 as if it is a regular tax payment. Further, since he did not file the appeal in time, therefore to protect himself from the disciplinary action, he adopted alternate route and filed rectification application under rule 60 which is not permissible under law in case demand has been raised on technical grounds. 7. A separate affidavit as to the facts of the case is also attached herewith. 8. It is stated that in view of the facts and circumstances mentioned above and in the attached affidavit, your honor would appreciate that the delay in filing the appeal is completely unintentional and for the bona fide reasons stated above. The applicant company should not be imposed with tax liabilities due to inaction and malafide intention on one employee. The Applicants further submit that if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for condonation of delay as prayed for. The appellate authority vide order dated 25.10.2018, considered the reasons offered by the respondent for the delay in filing of the appeal and concluded that the same were not substantiated with sufficient cause. On that finding including that the delay beyond the period of 60 days from the date of service of the assessment order on the respondent assessee cannot be condoned, the appellate authority observed thus: However, to abide the principles of natural justice, the appellant has been issued notices dated 03.10.2018 and 19.10.2018 to appear for admission hearings to be held on 10.10.2018 and 25.10.2018 respectively, in the office of Appellate Deputy Commissioner (CT), Vijayawada for explaining reasons and his contentions in support of the admission of appeal petition. The A.R. appeared for the admission hearing on 25.10.2018 and prayed for admission of appeal petition, but not submitted any reliable grounds and substantial documentary evidence in support of their submission that they were unaware of the receipt of original assessment order. It is further pertinent here to record that after receiving the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled to the High Court, the Division Bench, after hearing the respondent, proceeded to pass an ex parte order on 8.11.2018, which reads thus: ORDER: It is represented by Mr. S. Dwarakanath, learned counsel for the petitioner that the petitioner has already paid 12.5% of the disputed tax, for the purpose of filing an appeal. But, the employee, who was incharge and who was subsequently, suspended in contemplation of disciplinary proceedings, failed to file the appeal. The contention of the learned counsel for the petitioner is that the issue lies in a narrow campus. Since the petitioner has already paid 12.5% of the disputed tax, the request of the petitioner for granting one more opportunity would be considered favourably, if the petitioner pays an additional amount equivalent to 12.5% of the disputed tax. The petitioner shall make such payment within a period of one week. Post on 19.11.2018 for orders. Be it noted that the respondent was advised to file writ petition merely for setting aside of the assessment order dated 21.6.2017, presumably, in light of the decision of Full bench of the same High Court in Electronics Corporation of India Ltd. vs. Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on 26.7.2018 (ex. P 3) and also suspending him from official duties with immediate effect. 10. It is submitted that the Petitioner was not aware of the impugned order since that fact was not brought to the notice by its own employee, due to this negligence. 11. It appears, the said Mr. P. Sri Ram Murthy having realized his negligence, made further mistake, by filing an application under Rule 60 of the APVAT Rules read with Rule 14 A(10) of the CST (AP) Rules on 9.5.2018 (Ex. P 4) contending, inter alia, that the revised value of stock transfer as per VAT 200 B should have been considered instead of ₹ 866,25,15,490/ . In the said representation, it is claimed that it has filed revised returns under the VAT Act, disclosing the correct F form turnover for the purposes of restricting the input tax credit while filing Form 200 B at the end of the year. The ITC credit under VAT was also allowed by the 1st Respondent, considering the stock transfer turnover as ₹ 863,33,95,259/ . In the said representation, it was contended that the turnover of ₹ 1,85,03,360/ , could not have been levied with the tax since it is admittedly covered by F forms. 12. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t remediless. The petitioner submits that a full Bench of this Hon ble Court in Electronics Corporation of India Limited (Writ Petition Nos. 9482 and 9485 of 2017, dated 13.3.2018, dealing with similar situation, under Central Excise Act, held that even if the appeal time under the Act has expired, it does not prevent the assessee from preferring a Writ Petition under Article 226 of the Constitution. 10. The High Court finally allowed the writ petition vide the impugned judgment and order on the ground that the statutory remedy had become ineffective for the respondent (writ petitioner) due to expiry of 60 days from the date of service of the assessment order. Inasmuch as, the appellate authority had no jurisdiction to condone the delay after expiry of 60 days, despite the reason mentioned by the respondent of an extraordinary situation due to the act of commission and omission of its employee who was in charge of the tax matters, forcing the management to suspend him and initiate disciplinary proceedings against him. Soon after becoming aware about the assessment order, the respondent had filed the appeal, but that was after expiry of 60 days period. The High Court was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the request of the petitioner for granting one more opportunity would be considered favourably, if the petitioner pays an additional amount equivalent to 12.5% of the disputed tax. The petitioner shall make such payment within a period of one week. Post on 19.11.2018 for orders. Pursuant to the aforesaid order, the petitioner made payment of ₹ 9,59,190/ , representing 12.5% of the taxes for the year 2013 2014 (CST). The amount was paid on 13.11.2018. Therefore, the writ petition is ordered, the impugned order is set aside and the matter is remanded back to the 1st respondent. The petitioner shall appear before the 1st respondent on 10.12.2018 and explain the discrepancies. After such personal hearing, the 1st respondent may pass orders afresh. As a sequel, pending miscellaneous petitions, if any, shall stand closed. No costs. 11. In the backdrop of these facts, the central question is: whether the High Court ought to have entertained the writ petition filed by the respondent? As regards the power of the High Court to issue directions, orders or writs in exercise of its jurisdiction under Article 226 of the Constitution of India, the same is no more r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up. (emphasis supplied) We may usefully refer to the exposition of this Court in Titaghur Paper Mills Co. Ltd. Anr. Vs. State of Orissa Ors. (1983) 2 SCC 433 , wherein it is observed that where a right or liability is created by a statute, which gives a special remedy for enforcing it, the remedy provided by that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 536, this Court went on to observe that an Act cannot bar and curtail remedy under Article 226 or 32 of the Constitution. The Court, however, added a word of caution and expounded that the constitutional Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment. To put it differently, the fact that the High Court has wide jurisdiction under Article 226 of the Constitution, does not mean that it can disregard the substantive provisions of a statute and pass orders which can be settled only through a mechanism prescribed by the statute. 12. Indubitably, the powers of the High Court under Article 226 of the Constitution are wide, but certainly not wider than the plenary powers bestowed on this Court under Article 142 of the Constitution. Article 142 is a conglomeration and repository of the entire judicial powers under the Constitution, to do complete justice to the parties. Even while exercising that power, this Court is required to bear in mind the legislative intent and not to render the statutory provision otiose. in a recent decision of a three judge b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order inconsistent with the fundamental rights guaranteed by Part III of the Constitution. No question of inconsistency between Article 142(1) and Article 32 arose. Gajendragadkar, J., speaking [Prem Chand Garg v. Excise Commr., AIR 1963 SC 996] for the majority of the Judges of this Court said that Article 142(1) did not confer any power on this Court to contravene the provisions of Article 32 of the Constitution. Nor did Article 145 confer power upon this Court to make rules, empowering it to contravene the provisions of the fundamental right. At AIR pp. 1002 03, para 12 : SCR p. 899 of the Report, Gajendragadkar, J., reiterated that the powers of this Court are no doubt very wide and they are intended and will always be exercised in the interests of justice . But that is not to say that an order can be made by this Court which is inconsistent with the fundamental rights guaranteed by Part III of the Constitution. It was emphasised that an order which this Court could make in order to do complete justice between the parties, must not only be consistent with the fundamental rights guaranteed by the Constitution, but it cannot even be inconsistent with the substantive provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory provisions of substantive law must really mean and be understood as some express prohibition contained in any substantive statutory law. He suggested that if the expression prohibition is read in place of provision that would perhaps convey the appropriate idea. But we think that such prohibition should also be shown to be based on some underlying fundamental and general issues of public policy and not merely incidental to a particular statutory scheme or pattern. It will again be wholly incorrect to say that powers under Article 142 are subject to such express statutory prohibitions. That would convey the idea that statutory provisions override a constitutional provision. Perhaps, the proper way of expressing the idea is that in exercising powers under Article 142 and in assessing the needs of complete justice of a cause or matter, the Apex Court will take note of the express prohibitions in any substantive statutory provision based on some fundamental principles of public policy and regulate the exercise of its power and discretion accordingly. The proposition does not relate to the powers of the Court under Article 142, but only to what is or is not complete justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to say, it is based on certain underlined, fundamental, general issues of public policy as has been held in Union Carbide Corpn. case [Union Carbide Corpn. v. Union of India, (1991) 4 SCC 584]. As the pronouncement in Chhattisgarh SEB v. Central Electricity Regulatory Commission, (2010) 5 SCC 23, lays down quite clearly that the policy behind the Act emphasising on the constitution of a special adjudicatory forum, is meant to expeditiously decide the grievances of a person who may be aggrieved by an order of the adjudicatory officer or by an appropriate Commission. The Act is a special legislation within the meaning of Section 29(2) of the Limitation Act and, therefore, the prescription with regard to the limitation has to be the binding effect and the same has to be followed regard being had to its mandatory nature. To put it in a different way, the prescription of limitation in a case of present nature, when the statute commands that this Court may condone the further delay not beyond 60 days, it would come within the ambit and sweep of the provisions and policy of legislation. It is equivalent to Section 3 of the Limitation Act. Therefore, it is uncondonable and it cannot be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision such as Section 31 of the 1995 Act, cannot curtail the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This approach is faulty. It is not a matter of taking away the jurisdiction of the High Court. In a given case, the assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same is without jurisdiction or passed in excess of jurisdiction by overstepping or crossing the limits of jurisdiction including in flagrant disregard of law and rules of procedure or in violation of principles of natural justice, where no procedure is specified. The High Court may accede to such a challenge and can also non suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. However, if the writ petitioner choses to approach the High Court after expiry of the maximum limitation period of 60 days prescribed under Section 31 of the 2005 Act, the High Court cannot disregard the statutory period for redressal of the grievance and entertain the writ petition of such a party as a matter of cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on the ground that there is an adequate alternative remedy by way of an appeal under Section 35 of the Central Excise Act. Learned counsel for the petitioner submits that the petitioner will face certain difficulties in pursuing this remedy: (1) This remedy may not be any longer available to it because the appeal has to be filed within a period of three months from the date of the assessment order and delay can be condoned only to the extent of three more months by the Collector under Section 35 of the Act. It is pointed out that the petitioner did not file an appeal because the Collector (Appeal) at Madras had taken a view in a similar matter that an appeal was not maintainable. That apart, the petitioner in view of the huge demand involved filed a writ petition and so did not file an appeal. In the circumstances of the case, we are of the opinion that the ends of justice will be met if we permit the petitioner to file a belated appeal within one month from today with an application for condonation of delay, whereon the appeal may be entertained. Learned counsel for the Revenue has stated before us that the Revenue will not object to the entertainment of the appeal on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in support of the application for condonation of delay before the appellate authority), it is stated that the company became aware about the irregularities committed by its erring official (Mr. P. Sriram Murthy) in the month of July, 2018, which pre supposes that the respondent must have become aware about the assessment order, at least in July, 2018. In the same affidavit, it is asserted that the respondent company was not aware about the assessment order, as it was not brought to its notice by the employee concerned due to his negligence. The respondent in the writ petition has averred that the appeal was rejected by the appellate authority on the ground that it had no power to condone the delay beyond 30 days, when in fact, the order examines the cause set out by the respondent and concludes that the same was unsubstantiated by the respondent. That finding has not been examined by the High Court in the impugned judgment and order at all, but the High Court was more impressed by the fact that the respondent was in a position to offer some explanation about the discrepancies in respect of the volume of turnover and that the respondent had already deposited 12.5% of the additional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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