whether the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India ought to entertain a challenge to the assessment order on the sole
1 For short, “the High Court”
2
ground that the statutory remedy of appeal against that order
stood foreclosed by the law of limitation?
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2413/2020
(Arising out of SLP(C) No. 12892/2019)
Assistant Commissioner (CT)
LTU, Kakinada & Ors. …Appellant(s)
Versus
M/s. Glaxo Smith Kline Consumer
Health Care Limited ...Respondent(s)
J U D G M E N T
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
Pradesh1
is: whether the High Court in exercise of its writ
jurisdiction under Article 226 of the Constitution of India ought
to entertain a challenge to the assessment order on the sole
1 For short, “the High Court”
2
ground that the statutory remedy of appeal against that order
stood foreclosed by the law of limitation?
3. The respondent is a registered dealer on the rolls of
Assistant Commissioner of Commercial Taxes, Large Tax Payer
Unit at Kakinada Division2
under the provisions of Andhra
Pradesh Value Added Tax Act, 20053
and the Central Sales Tax
Act, 19564
and is engaged in the business of manufacturing and
sale of Horlicks, Boost, Biscuits, Ghee, Ayurvedic Medicines etc.
The Assistant Commissioner had called upon the respondent to
produce books of accounts for the assessment year 201314 for
finalisation of assessment under the 1956 Act. The authorised
representative of the respondent produced declaration in Form
“F” in support of its claim that certain transactions are interState transfers. The information and declaration furnished by
the respondent was duly verified and after giving personal
hearing to the respondent, final assessment order came to be
passed by the Assistant Commissioner on 21.6.2017, raising
demand of Rs.76,73,197/ (Rupees seventy six lakhs seventy
three thousand one hundred ninety seven only) against turnover
2 For short, “the Assistant Commissioner”
3 For short, ”the 2005 Act”
4 For short, “the 1956 Act”
3
of Rs.3,44,15,240/ (Rupees three crores forty four lakhs fifteen
thousand two hundred forty only) on the finding that the
respondent had failed to submit Form “F” to the tune of the
turnover reported in the Central Sales Tax (CST) return. This
assessment order was duly served on the respondent on
22.6.2017. The respondent did not file appeal against this
assessment order within the statutory period. Instead, amount
equivalent to 12.5% of the demand was deposited on 12.9.2017.
The respondent then filed an application under Rule 60 of the
Andhra Pradesh Value Added Tax Rules, 20055
, highlighting the
error made in raising the demand based on incorrect turnover
reported by the respondent. This application was filed only on
8.5.2018, which came to be rejected by the Assistant
Commissioner vide order dated 11.5.2018. Aggrieved by the
decision dated 11.5.2018, the respondent filed an appeal before
the Appellate Deputy Commissioner of Commercial Taxes,
Vijayawada6
on 28.5.2018, which came to be rejected on
17.8.2018. It is only thereafter, the respondentassessee was
advised to file appeal before the Appellate Deputy Commissioner
5 For short, “the 2005 Rules”
6 For short, “the Appellate Deputy Commissioner” or “the appellate authority”, as the
case may be”
4
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 redo the assessment and reckon the correct Branch Transfer
turnover and grant exemption on the basis of Form “F”. The
respondent did not challenge the order passed by the Appellate
Deputy Commissioner, rejecting the statutory appeal preferred by
the respondent against the assessment order dated 21.6.2017,
5
for reasons best known to the respondent. The Division Bench of
the High Court, on 8.11.2018, noted that the respondent had
already paid 12.5% of the disputed tax, for the purpose of filing
an appeal. It also noted the stand taken by the respondent that
the employee who was in charge of the tax matters of the
respondent, had defaulted and was subsequently suspended in
contemplation of disciplinary proceedings, as a result of which
statutory appeal could not be filed within the prescribed time.
The Division Bench of the High Court directed the respondent to
pay an additional amount equivalent to 12.5% of the disputed tax
within one week and posted the matter for 19.11.2018. This was
an exparte order. The respondent, in terms of the stated order,
deposited an additional amount equivalent to 12.5% of the
disputed tax amount. The writ petition was then taken up for
hearing on 19.11.2018, when after hearing the counsel for the
parties, the writ petition came to be allowed and the order passed
by the Assistant Commissioner, dated 21.6.2017 has been
quashed and set aside and the respondent relegated before the
Assistant Commissioner for reconsideration of the matter afresh
after giving personal hearing to the respondent to explain the
discrepancies. This order has also noted that the respondent had
6
paid Rs.9,59,190/ (Rupees nine lakhs fiftynine thousand one
hundred ninety only) equivalent to the 12.5% of the taxes in the
year 201314 (CST) on 13.11.2018.
5. Feeling aggrieved, the appellants have filed the present
appeal. It is urged that the respondent having failed to avail of
statutory remedy of appeal within the prescribed time and also
because the delay in filing appeal had not been satisfactorily
explained, the High Court ought not to have entertained the writ
petition at the instance of such person and moreso, because the
respondent had allowed the order passed by the appellate
authority rejecting the appeal on the ground of delay to become
final. In substance, the argument is that the High Court
exceeded its jurisdiction and committed manifest error in setting
aside the assessment order dated 21.6.2017 passed by 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
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 was served on him,
appeal to such authority as may be prescribed:
Provided that the appellate authority may within a
further period of thirty days admit the appeal preferred
after a period of thirty days if he is satisfied that the VAT
dealer or TOT dealer or any other dealer had sufficient
cause for not preferring the appeal within that period:
Provided further that an appeal so preferred shall
not be admitted by the appellate authority concerned
unless the dealer produces the proof of payment of tax,
penalty, interest or any other amount admitted to be due,
or of such instalments as have been granted, and the
proof of payment of twelve and half percent of the
difference of the tax, penalty, interest or any other
amount, assessed by the authority prescribed and the
tax, penalty, interest or any other amount admitted by
the appellant, for the relevant tax period, in respect of
which the appeal is preferred.
8
(2) The appeal shall be in such form, and verified in
such manner, as may be prescribed and shall be
accompanied by a fee which shall not be less than
Rs.50/ (Rupees fifty only) but shall not exceed Rs.1000/
(Rupees one thousand only) as may be prescribed.
(3) (a) Where an appeal is admitted under subsection
(1), the appellate authority may, on an application filed by
the appellant and subject to furnishing of such security
or on payment of such part of the disputed tax within
such time as may be specified, order stay of collection of
balance of the tax under dispute pending disposal of the
appeal;
(b) Against an order passed by the appellate
authority refusing to order stay under clause (a), the
appellant may prefer a revision petition within thirty
days from the date of the order of such refusal to the
Additional Commissioner or the Joint Commissioner
who may subject to such terms and conditions as he
may think fit, order stay of collection of balance of the
tax under dispute pending disposal of the appeal by
the appellate authority;
(c) Notwithstanding anything in clauses (a) or (b),
where a VAT dealer or TOT dealer or any other dealer
has preferred an appeal to the Appellate Tribunal
under Section 33, the stay, if any, ordered under
clause (b) shall be operative till the disposal of the
appeal by such Tribunal, and, the stay, if any ordered
under clause (a) shall be operative till the disposal of
the appeal by 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.
9
(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 excluded, while
computing the period of two years specified in subsection
(4) for the purpose of passing appeal order under this
section.
(5) Before passing orders under subsection (4), the
appellate authority may make such enquiry as it deems
fit or remand the case to any subordinate officer or
authority for an inquiry and report on any specified point
or points.
(6) Every order passed in appeal under this section
shall, subject to the provisions of sections 32, 33, 34 and
35 be final.”
Going by the text of this provision, it is evident that the statutory
appeal is required to be filed within 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,
10
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 in the following
words:
“2. It is submitted that the impugned OrderinOriginal
dated 21.06.2017 was received by the Applicant on
22.06.2017 and the appeal ought to have been filed by
the applicant on 21.07.2017 in terms of section 31 of the
Andhra Pradesh VAT Act, 2005. Thus, there is delay in
filing the appeal. The Applicants further submits that the
delay is not due to any negligence on part of the
Applicant.
3. It is submitted that the impugned order was
received by Mr. P. Sriram Murthy, but the receipt of this
assessment order was not informed to any other person
of the company.
4. Mr. P. Sriram Murthy was authorized to handle day
to day affairs of sales tax (VAT), service tax and excise
and he was also authorized to sign and submit
documents with the tax departments, file periodic tax
returns and represent the company before Concerned tax
authorities.
5. However, the company has alleged Mr. P. Sriram
Murthy with committing 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.
11
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 the delay in filing the above
numbered appeal is not condoned, the Applicant would
be put to great injustice and irreparable injury. On the
other hand, no prejudice would be caused if the delay is
condoned.
WHEREFORE, it is prayed that the Ld. Appellate
Joint Commissioner (ST) be pleased to allow the
application for condonation of delay as prayed for.”
As stated in the application for condonation of delay in filing the
statutory appeal, the respondent caused to file affidavit of
Mr. Sreedhar Routh, son of Late Mr. R. Seetha Rama Swamy,
who was working as Site Director in the respondent company. In
this affidavit, in support of the application for condonation of
delay, it is averred thus:
“…..
That Mr. P. Sriram Murthy, Deputy ManagerFinance,
was authorized to handle day to day affairs of sales tax
(VAT), service tax and excise. He was also authorized to
sign and submit documents with the tax departments,
file periodic tax returns and represent the company
before concerned tax authorities.
that the CST assessment for the period 201314 was
completed by the Assistant Commissioner (CT) LTU
raising demand of Rs.76,73,197/ vide assessment order
dated 21.06.2017.
12
that the assessment order was received by Mr. P. Sriram
Murthy. But, the receipt of this assessment order was not
informed to any other person of the company.
that Mr. P. Sriram Murthy filed application under Rule 60
of the Andhra Pradesh Act, 2005 without informing the
company about such filing.
that Mr. P. Sriram Murthy also engaged a Chartered
Accountant and filed an appeal against rejection of
application filed under rule 60. The appointment of
Chartered Accountant and filing this appeal was also not
informed to the company.
that the company has alleged Mr. P. Sriram Murthy with
committing certain irregularities and initiated
disciplinary proceedings against him.
that Mr. P. Sriram Murthy has been suspended from his
official duties with effect from 26th July 2018.
Investigation in this matter is going on.
that it is only post his suspension that we have come to
know about the demand of Rs.76,73,197/ lakhs raised
vide CST assessment order for the year 20132014 and
therefore could not respond or take any action in respect
of this order/demand.
It is prayed that the Ld. Appellate Joint Commissioner
(ST) be pleased to allow the application 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 respondentassessee cannot be condoned, the
appellate authority observed thus:
13
“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 assessment order, the appellantdealer has filed a request letter before the assessing
authority for reassessment under rule 60 of APVAT
Rules, 2005. However, the AA has not considered reassessment request, and issued an endorsement
dt.11.05.2018, rejecting the reassessment request. The
appellant also filed an appeal on such endorsement. That
appeal petition based on endorsement has also not been
admitted in this office and rejected vide ADC’s orders no.
3470, dt. 17.08.2018. Therefore, cannot be assumed
under any circumstances, and by no stretch of
imagination that the appellantdealer was not aware of
the service of original assessment orders. Hence, it is to
be affirmed that the causes putforth for delay
condonation are not rational and against the facts of the
case. It is also relevant here to state that whatever may
be circumstances, the delay beyond 60 days could not be
condonable in the hands of the appellate authority,
therefore, such request primafacie is not in tune with
the provisions of the Act, hence, liable to be rejected.
From the aforesaid discussion, it is construed that no
favourable grounds can be made to admit the appeal,
since the appellant have failed to file appeal petition
within the prescribed time under APVAT Act, 2005. It is
also pertinent here to note that the Department has duly
served the original assessment order to the appellant
without any procedural lapse, and also the appellant has
admitted that the original orders were received on
22.06.2017.
In view of the above, since the appellant failed to prefer
an appeal on the original assessment order dated
21.06.2017, which was duly served on the appellant, and
14
as such the original assessment order has become final,
and the present appeal filed by the appellant on
24.09.2018 with a delay of 1 year 62 days, hence cannot
be admitted.
Further the appellants have not submitted any
valid reasons/sufficient cause for not preferring the
appeal within the prescribed & condonable time of
30+30=60 days of receipt of the original assessment
order. Hence the appeal petition is hereby REJECTED
as per the provisions of Section 31 of APVAT Act.”
(emphasis supplied)
The appellate authority was pleased to reject the explanation that
the respondent was not aware of the service of assessment order,
as it remained unsubstantiated by the respondent. When the
matter travelled to the High Court, the Division Bench, after
hearing the respondent, proceeded to pass an exparte 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.”
15
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
of India & Ors.7
.
9. We may advert to the assertions made in the writ petition
(on the basis of which the High Court was pleased to grant relief
to the respondent), to explain the delay in filing of the statutory
appeal including the reason why the respondent should be given
one opportunity. The same read thus:
“…..
7. From the above, it can be summarized that the total
disputed demand has arisen on account of two reasons.
Firstly, the 1st Respondent has considered the total
branch transfer turnover as per monthly CST returns
and ignored the revised turnover as per VAT 200B. Even
though, the such revised stock transfer value was
considered by the 1st Respondent while computing the
ITC credit as per rule 20 (8) of AP VAT act. Secondly,
receipt of excess forms on account of inclusion of value of
freebies, free samples etc. by receiving state while issuing
the F Forms. The 1st Respondent treated these excess F
Forms value as concealment by the petitioner and levied
tax even, on this branch transfer value duly covered by F
Forms which is [sic] grossly against the principle of law.
8. It is submitted that the order was served on the
petitioner on 22.6.2017 against which, the Petitioner
could have preferred appeal before the 2nd Respondent
within 30 days from the said date. Unfortunately, no
steps were taken to file any appeal within the due date
for the reason that the day to day affairs of the Sales Tax,
7 2018 (361) ELT 22(A.P.)
16
Service Tax and Excise Law was being handled by one
Mr. P. Sri Ram Murthy, who was working as Deputy
Manager (Finance) in the Company, who failed to take
‘appropriate steps to prefer an appeal within time, by his
negligence. Excepting Mr. P. Sri Ram Murthy, there was
no other person who was well conversant with the facts
and the steps to be taken against the assessment order.
The other person Mr. Siddhant Belgaonker, Senior
Manager (Finance) who attended the assessment hearing
also left the services of the Petitioner on 31.1.2018.
Consequently, the assessment order remained
uncontested.
9. It is respectfully submitted that apart from this act
of negligence, Mr. P. Sri Ram Murthy also committed
certain other irregularities over a period of one year,
which came to the light of the Management of the
Company in the month of July, 2018. Immediately,
disciplinary proceedings were initiated against him, by
issuing a notice on 26.7.2018 (ex. P3) 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 14A(10) of the CST (AP) Rules on 9.5.2018 (Ex. P4)
contending, interalia, that the revised value of stock
transfer as per VAT 200B should have been considered
instead of Rs.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 200B at the end of the year. The
ITC credit under VAT was also allowed by the 1st
Respondent, considering the stock transfer turnover as
Rs.863,33,95,259/. In the said representation, it was
contended that the turnover of Rs.1,85,03,360/, could
not have been levied with the tax since it is admittedly
covered by ‘F’ forms.
12. The representation of the Petitioner under Rule 60
was rejected by the 1st Respondent, by endorsement,
dated 11.5.2018 (Ex. P5) on the ground, that it is not a
case for considering it as a mistake rectifiable under Rule
60. It is also submitted that Mr. P. Sri Ram Murthy
17
appear to have filed an appeal against the endorsement of
the 1st Respondent dated 11.5.2018 to 2nd Respondent on
28.5.2018. This was also without knowledge of the
petitioner’s management.
13. It is submitted that the Petitioner was not aware of
these developments till the misdeeds of Mr. P. Sri Ram
Murthy were being enquired into. It is submitted that Mr.
P. Sri Ram Murthy has in fact, remitted an amount of
Rs.9,59,150/ being 12.5% of the disputed tax in the
assessment order online, on 12.9.2017 (Ex. P6). The
payment was made as if it is towards miscellaneous tax
payment for June, 2014. When the Petitioner was seeking
to reconcile as to how this amount was deposited and
under what account it came to known it is for the
purpose of preferring an appeal against the impugned
order. All this verification happened post suspension of
Mr. P. Sri Ram Murthy.
14. The Petitioner faced with this unfortunate situation,
filed an appeal under Section 31 of the VAT Act on
24.9.2018 on the bona fide belief that there are good
grounds for condonation of the delay since the Petitioner
cannot suffer for the errors committed by one of its
employees.
15. It is submitted that the 2nd Respondent, vide order,
dated 25.10.2018 (Ex. P7), rejected the appeal on the
ground that he has no power to condone the delay
beyond 30 days. It is also observed in the said order that
appeal against the Endorsement was also dismissed by
him on 17.8.2018. However, copy of the order is not yet
served on the petitioner. The 2nd Respondent observed
that the Petitioner cannot dispute the service of
assessment order on 22.6.2017 and failure to file the
appeal within 60 days would mean that the assessment
order has attained finality.
16. The petitioner submits that filing of a further appeal
to the APVAT Appellate Tribunal at Visakhapatnam is a
futile exercise, since as a creature under the Act, the
Tribunal cannot find fault with the 2nd Respondent for not
condoning the delay beyond 30 days.
17. The petitioner has lost the appellate remedy by
efflux of time. It does not mean that the Petitioner should
be left 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,
18
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
impressed by the contention pressed into service by the
respondent that it ought to be given one opportunity to explain to
the authority (Assistant Commissioner) about the discrepancies
between the value reported in the CST returns and the amount
indicated in Form “F” relating to the turnover. The additional
19
reason as can be discerned from the impugned order is that the
respondent had already deposited an additional amount
equivalent to 12.5% of the disputed tax amount in terms of the
earlier order. We deem it apposite to reproduce the impugned
order of the High Court. The same reads thus:
“…..
The impugned order of assessment is dated 21.6.2017.
As against the said order the petitioner filed an appeal
with a delay. Since the delay was beyond the period after
which it can be condoned, the same was not entertained.
Therefore, the petitioner has come up with the above writ
petition.
The reason stated by the petitioner is that one of the
employees who was in charge, indulged in malpractices
forcing the management to suspend him and initiate
disciplinary proceedings. The petitioner claims that they
were not aware of these orders. Therefore, the petitioner
seeks one opportunity.
The reason why the petitioner seeks one opportunity is
that ‘F’ forms submitted by the petitioner were rejected by
the Assessing Officer, on the ground that the value of the
goods transferred to branch office have not been
disclosed in ‘F’ forms. But the claim of the petitioner is
that the value was wrongly reported in the CST returns
and that the amount indicated in the ‘F’ forms was more
than the turnover. Therefore, they seek one opportunity
to explain this discrepancy.
In view of the peculiar circumstances, even while
granting an opportunity to the petitioner, we wanted to
put them on condition. Therefore, on 8.11.2018 we
passed an interim order to the following effect,
“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
20
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.”
Pursuant to the aforesaid order, the petitioner made
payment of Rs.9,59,190/, representing 12.5% of the
taxes for the year 20132014 (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
1
st 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 res integra. Even though the High Court can
entertain a writ petition against any order or direction
passed/action taken by the State under Article 226 of the
Constitution, it ought not to do so as a matter of course when the
21
aggrieved person could have availed of an effective alternative
remedy in the manner prescribed by law (see Baburam Prakash
Chandra Maheshwari vs. Antarim Zila Parishad now Zila
Parishad, Muzaffarnagar8 and also Nivedita Sharma vs.
Cellular Operators Association of India & Ors.9
). In
Thansingh Nathmal & Ors. vs. Superintendent of Taxes,
Dhubri & Ors.10, the Constitution Bench of this Court made it
amply clear that although the power of the High Court under
Article 226 of the Constitution is very wide, the Court must
exercise selfimposed restraint and not entertain the writ petition,
if an alternative effective remedy is available to the aggrieved
person. In paragraph 7, the Court observed thus:
“7. Against the order of the Commissioner an order for
reference could have been claimed if the appellants
satisfied the Commissioner or the High Court that a
question of law arose out of the order. But the procedure
provided by the Act to invoke the jurisdiction of the High
Court was bypassed, the appellants moved the High
Court challenging the competence of the Provincial
Legislature to extend the concept of sale, and invoked the
extraordinary jurisdiction of the High Court under Article
226 and sought to reopen the decision of the Taxing
Authorities on question of fact. The jurisdiction of the
High Court under Article 226 of the Constitution is
couched in wide terms and the exercise thereof is not
subject to any restrictions except the territorial
restrictions which are expressly provided in the Articles.
8 AIR 1969 SC 556
9 (2011) 14 SCC 337
10 AIR 1964 SC 1419
22
But the exercise of the jurisdiction is discretionary: it
is not exercised merely because it is lawful to do so.
The very amplitude of the jurisdiction demands that
it will ordinarily be exercised subject to certain selfimposed limitations. Resort that jurisdiction is not
intended as an alternative remedy for relief which
may be obtained in a suit or other mode prescribed by
statute. Ordinarily the Court will not entertain a
petition for a writ under Article 226, where the
petitioner has an alternative remedy, which without
being unduly onerous, provides an equally efficacious
remedy. 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.11
,
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 statute must only be availed of. In
paragraph 11, the Court observed thus:
11 (1983) 2 SCC 433
23
“11. Under the scheme of the Act, there is a hierarchy of
authorities before which the petitioners can get adequate
redress against the wrongful acts complained of. The
petitioners have the right to prefer an appeal before the
Prescribed Authority under subsection (1) of Section 23
of the Act. If the petitioners are dissatisfied with the
decision in the appeal, they can prefer a further appeal to
the Tribunal under subsection (3) of Section 23 of the
Act, and then ask for a case to be stated upon a question
of law for the opinion of the High Court under Section 24
of the Act. The Act provides for a complete machinery
to challenge an order of assessment, and the
impugned orders of assessment can only be
challenged by the mode prescribed by the Act and not
by a petition under Article 226 of the Constitution. It
is now well recognised that where a right or liability
is created by a statute which gives a special remedy
for enforcing it, the remedy provided by that statute
only must be availed of. This rule was stated with great
clarity by Willes, J. in Wolverhampton New Waterworks
Co. v. Hawkesford [(1859) 6 CBNS 336, 356] in the
following passage:
There are three classes of cases in which a
liability may be established founded upon
statute. . . . But there is a third class, viz.
where a liability not existing at common law is
created by a statute which at the same time
gives a special and particular remedy for
enforcing it…. The remedy provided by the
statute must be followed, and it is not
competent to the party to pursue the course
applicable to cases of the second class. The
form given by the statute must be adopted and
adhered to.
The rule laid down in this passage was approved by the
House of Lords in Neville v. London Express Newspapers
Ltd. (1919 AC 368) and has been reaffirmed by the Privy
Council in AttorneyGeneral of Trinidad and
Tobago v. Gordon Grant & Co. Ltd. (1935 AC 532)
and Secretary of State v. Mask & Co. (AIR 1940 PC 105).
It has also been held to be equally applicable to
enforcement of rights, and has been followed by this
Court throughout. The High Court was therefore justified
in dismissing the writ petitions in limine.”
24
(emphasis supplied)
In the subsequent decision in Mafatlal Industries Ltd. & Ors.
vs. Union of India & Ors.12, 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
12 (1997) 5 SCC 536
25
render the statutory provision otiose. In a recent decision of a
threeJudge Bench of this Court in Oil and Natural Gas
Corporation Limited vs. Gujarat Energy Transmission
Corporation Limited & Ors.13, the statutory appeal filed before
this Court was barred by 71 days and the maximum time limit
for condoning the delay in terms of Section 125 of the Electricity
Act, 2003 was only 60 days. In other words, the appeal was
presented beyond the condonable period of 60 days. As a result,
this Court could not have condoned the delay of 71 days.
Notably, while admitting the appeal, the Court had condoned the
delay in filing the appeal. However, at the final hearing of the
appeal, an objection regarding appeal being barred by limitation
was allowed to be raised being a jurisdictional issue and while
dealing with the said objection, the Court referred to the
decisions in Singh Enterprises vs. Commissioner of Central
Excise, Jamshedpur & Ors.14, Commissioner of Customs and
Central Excise vs. Hongo India Private Limited & Anr.15
,
Chhattisgarh State Electricity Board vs. Central Electricity
13 (2017) 5 SCC 42
14 (2008) 3 SCC 70
15 (2009) 5 SCC 791
26
Regulatory Commission & Ors.16 and Suryachakra Power
Corporation Limited vs. Electricity Department represented
by its Superintending Engineer, Port Blair & Ors.17 and
concluded that Section 5 of the Limitation Act, 1963 cannot be
invoked by the Court for maintaining an appeal beyond
maximum prescribed period in Section 125 of the Electricity Act.
13. The principle underlying the dictum in this decision would
apply proprio vigore to Section 31 of the 2005 Act including to the
powers of the High Court under Article 226 of the Constitution.
Notably, in this decision, a submission was canvassed by the
assessee that in the peculiar facts of that case (as urged in the
present case), the Court may exercise its jurisdiction under
Article 142 of the Constitution, so that complete justice can be
done. This argument has been considered and plainly rejected in
the following words:
“12. In A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602,
while explicating and elaborating the principles under
Article 142, Sabyasachi Mukharji, J. (as his Lordship
then was) opined thus: (SCC p. 656, para 50)
“50. … The fact that the rule was discretionary
did not alter the position. Though Article 142(1)
empowers the Supreme Court to pass any order
to do complete justice between the parties, the
16 (2010) 5 SCC 23
17 (2016) 16 SCC 152
27
court cannot make 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.
100203, 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 provisions of the relevant
statutory laws. The court therefore, held that it
was not possible to hold that Article 142(1)
conferred upon this Court powers which could
contravene the provisions of Article 32.”
(emphasis in original)
13. The said decision has been clarified by a
Constitution Bench in Union Carbide Corpn. v. Union of
India, (1991) 4 SCC 584, wherein M.N. Venkatachaliah,
J. (as his Lordship then was) speaking for the majority,
ruled that: (SCC pp. 63435, para 83)
“83. It is necessary to set at rest certain
misconceptions in the arguments touching the
scope of the powers of this Court under Article
142(1) of the Constitution. These issues are
matters of serious public importance. The
proposition that a provision in any ordinary law
irrespective of the importance of the public
policy on which it is founded, operates to limit
28
the powers of the Apex Court under Article
142(1) is unsound and erroneous. In both Prem
Chand Garg v. Excise Commr., AIR 1963 SC
996, as well as A.R. Antulay v. R.S. Nayak,
(1988) 2 SCC 602, cases the point was one of
violation of constitutional provisions and
constitutional rights. The observations as to the
effect of inconsistency with statutory provisions
were really unnecessary in those cases as the
decisions in the ultimate analysis turned on the
breach of constitutional rights. We agree with
Shri Nariman that the power of the Court under
Article 142 insofar as quashing of criminal
proceedings are concerned is not exhausted by
Section 320 or 321 or 482 CrPC or all of them
put together. The power under Article 142 is at
an entirely different level and of a different
quality. Prohibitions or limitations or provisions
contained in ordinary laws cannot, ipso facto,
act as prohibitions or limitations on the
constitutional powers under Article 142. Such
prohibitions or limitations in the statutes might
embody and reflect the scheme of a particular
law, taking into account the nature and status
of the authority or the court on which
conferment of powers — limited in some
appropriate way — is contemplated. The
limitations may not necessarily reflect or be
based on any fundamental considerations of
public policy. Shri Sorabjee, learned Attorney
General, referring to Garg case [Prem Chand
Garg v. Excise Commr., AIR 1963 SC 996], said
that limitation on the powers under Article 142
arising from “inconsistency with express
statutory 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
29
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 justice” of a cause or matter
and in the ultimate analysis of the propriety of
the exercise of the power. No question of lack of
jurisdiction or of nullity can arise.”
(emphasis in original)
14. In this regard, another Constitution Bench
in Supreme Court Bar Assn. v. Union of India, (1998) 4
SCC 409] opined: (SCC pp. 43738, para 56)
“56. As a matter of fact, the observations
on which emphasis has been placed by us from
the Union Carbide case [Union Carbide
Corpn. v. Union of India, (1991) 4 SCC
584], A.R. Antulay case [A.R. Antulay v. R.S.
Nayak, (1988) 2 SCC 602] and Delhi Judicial
Service Assn. v. State of Gujarat, (1991) 4 SCC
406, go to show that they do not strictly
speaking come into any conflict with the
observations of the majority made in Prem
Chand Garg case [Prem Chand Garg v. Excise
Commr., AIR 1963 SC 996]. It is one thing to
say that “prohibitions or limitations in a
statute” cannot come in the way of exercise of
jurisdiction under Article 142 to do complete
justice between the parties in the pending
“cause or matter” arising out of that statute,
but quite a different thing to say that while
exercising jurisdiction under Article 142, this
Court can altogether ignore the substantive
provisions of a statute, dealing with the subject
and pass orders concerning an issue which can
be settled only through a mechanism prescribed
30
in another statute. This Court did not say so
in Union Carbide case [Union Carbide
Corpn. v. Union of India, (1991) 4 SCC 584]
either expressly or by implication and on the
contrary it has been held that the Apex
Court will take note of the express provisions of
any substantive statutory law and regulate the
exercise of its power and discretion accordingly.
…”
(emphasis in original)
15. From the aforesaid decisions, it is clear as crystal
that the Constitution Bench in Supreme Court Bar
Assn. v. Union of India, (1998) 4 SCC 409, has ruled that
there is no conflict of opinion in Antulay case [A.R.
Antulay v. R.S. Nayak, (1988) 2 SCC 602] or in Union
Carbide Corpn. case [Union Carbide Corpn. v. Union of
India, (1991) 4 SCC 584] with the principle set down
in Prem Chand Garg v. Excise Commr., AIR 1963 SC 996.
Be it noted, when there is a statutory command by
the legislation as regards limitation and there is the
postulate that delay can be condoned for a further
period not exceeding sixty days, needless 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
31
uncondonable and it cannot be condoned taking
recourse to Article 142 of the Constitution.
16. We had stated earlier that we will be adverting to
the passage in Suryachakra Power Corpn.
Ltd. v. Electricity Deptt., (2016) 16 SCC 152. There, the
Court had referred to Section 14 of the Limitation Act. It
fundamentally relied on M.P. Steel Corpn. v. CCE, (2015)
7 SCC 58, wherein the Court after referring to certain
authorities, analysed thus: (M.P. Steel Corpn. Case), SCC
p. 91, para 43)
“43. … when a certain period is excluded by
applying the principles contained in Section 14,
there is no delay to be attributed to the
appellant and the limitation period provided by
the statute concerned continues to be the stated
period and not more than the stated period. We
conclude, therefore, that the principle of Section
14 which is a principle based on advancing the
cause of justice would certainly apply to exclude
time taken in prosecuting proceedings which are
bona fide and with due diligence pursued, which
ultimately end without a decision on the merits
of the case.””
(emphasis in italics – in original, and in bold – supplied)
Similarly, in State vs. Mushtaq Ahmad & Ors.18, this Court
opined that where minimum sentence is provided for an offence
then no Court can impose lesser punishment on ground of
mitigating factors.
14. A priori, we have no hesitation in taking the view that what
this Court cannot do in exercise of its plenary powers under
Article 142 of the Constitution, it is unfathomable as to how the
High Court can take a different approach in the matter in
18 (2016) 1 SCC 315
32
reference to Article 226 of the Constitution. The principle
underlying the rejection of such argument by this Court would
apply on all fours to the exercise of power by the High Court
under Article 226 of the Constitution.
15. We may now revert to the Full Bench decision of the Andhra
Pradesh High Court in Electronics Corporation of India Ltd.
(supra), which had adopted the view taken by the Full Bench of
the Gujarat High Court in Panoli Intermediate (India) Pvt. Ltd.
vs. Union of India & Ors.19 and also of the Karnataka High
Court in Phoenix Plasts Company vs. Commissioner of
Central Excise (AppealI), Bangalore20. The logic applied in
these decisions proceeds on fallacious premise. For, these
decisions are premised on the logic that 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
19 AIR 2015 Guj 97
20 2013 (298) ELT 481 (Kar.)
33
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 nonsuit 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 course. Doing so would be in the teeth of
the principle underlying the dictum of a threeJudge Bench of
this Court in Oil and Natural Gas Corporation Limited
(supra). In other words, the fact that the High Court has wide
powers, does not mean that it would issue a writ which may be
inconsistent with the legislative intent regarding the dispensation
explicitly prescribed under Section 31 of the 2005 Act. That
would render the legislative scheme and intention behind the
stated provision otiose.
34
16. The respondent had relied on the decision of this Court in
K.S. Rashid & Son vs. the Income Tax Investigation
Commission21. This decision of the Constitution Bench, no
doubt, deals with the extent of power of the High Court under
Article 226 of the Constitution and the situation when the High
Court can refuse to exercise its discretion, such as when
alternative efficacious remedy is available to the aggrieved party.
In paragraph 4 (last paragraph) of this decision, however, the
Court plainly noted that it was not necessary to express any final
opinion on the question as to whether Section 8(5) of the
Taxation on Income (Investigation Commission) Act, 1947 (Act
XXX of 1947) is to be regarded as providing the only remedy
available to the aggrieved party and that it excludes altogether
the remedy provided for under Article 226 of the Constitution.
17. Reliance was then placed on a threeJudge Bench decision
of this Court in ITC Ltd. & Anr. Vs. Union of India22. In that
case, the High Court had dismissed the writ petition on the
ground that the petitioner therein had an adequate alternative
remedy by way of an appeal under Section 35 of the Central
21 AIR 1954 SC 207
22 (1998) 8 SCC 610
35
Excise Act. Concededly, this Court was pleased to uphold that
opinion of the High Court. However, whilst considering the
difficulty expressed by the petitioner therein that the statutory
remedy of appeal had now become time barred during the
pendency of the proceedings before the High Court and before
this Court, the Court permitted the petitioner therein to resort to
remedy of statutory appeal and directed the appellate authority
to decide the appeal on merits. This obviously was done on the
basis of concession given by the counsel appearing for the
Revenue as noted in paragraph 2(1) of the order, which reads
thus:
“2. The High Court has dismissed the writ petition filed
by the petitioner 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
36
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
ground that it is barred by time. In view of
this direction and concession, the petitioner
will have an effective alternative remedy by
way of an appeal.
(emphasis supplied)
In that case, it appears that the writ petition was filed within
statutory period and legal remedy was being pursued in good
faith by the assessee (appellant).
18. Suffice it to observe that this decision is on the facts of that
case and cannot be cited as a precedent in support of an
argument that the High Court is free to entertain the writ petition
assailing the assessment order even if filed beyond the statutory
period of maximum 60 days in filing appeal. The remedy of
appeal is creature of statute. If the appeal is presented by the
assessee beyond the extended statutory limitation period of 60
days in terms of Section 31 of the 2005 Act and is, therefore, not
entertained, it is incomprehensible as to how it would become a
case of violation of fundamental right, much less statutory or
legal right as such.
37
19. Arguendo, reverting to the factual matrix of the present
case, it is noticed that the respondent had asserted that it was
not aware about the passing of assessment order dated
21.6.2017 although it is admitted that the same was served on
the authorised representative of the respondent on 22.6.2017.
The date on which the respondent became aware about the order
is not expressly stated either in the application for condonation of
delay filed before the appellate authority, the affidavit filed in
support of the said application or for that matter, in the memo of
writ petition. On the other hand, it is seen that the amount
equivalent to 12.5% of the tax amount came to be deposited on
12.9.2017 for and on behalf of respondent, without filing an
appeal and without any demur after the expiry of statutory
period of maximum 60 days, prescribed under Section 31 of the
2005 Act. Not only that, the respondent filed a formal application
under Rule 60 of the 2005 Rules on 8.5.2018 and pursued the
same in appeal, which was rejected on 17.8.2018. Furthermore,
the appeal in question against the assessment order came to be
filed only on 24.9.2018 without disclosing the date on which the
respondent in fact became aware about the existence of the
assessment order dated 21.6.2017. On the other hand, in the
affidavit of Mr. Sreedhar Routh, Site Director of the respondent
38
company (filed 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 presupposes 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 amount in terms of the
previous order passed by it. That reason can have no bearing on
the justification for nonfiling of the appeal within the statutory
39
period. Notably, the respondent had relied on the affidavit of the
Site Director and no affidavit of the concerned employee (P.
Sriram Murthy, Deputy ManagerFinance) or at least the other
employee [Siddhant Belgaonker, Senior Manager (Finance)], who
was associated with the erring employee during the relevant
period, has been filed in support of the stand taken in the
application for condonation of delay. Pertinently, no finding has
been recorded by the High Court that it was a case of violation of
principles of natural justice or noncompliance of statutory
requirements 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.
20. Reverting to the contention that the respondent having
failed to assail the order passed by the appellate authority, dated
25.10.2018 rejecting the application for condonation of delay, the
assessment order passed by the Assistant Commissioner, dated
21.6.2017 stood merged, need not detain us in view of the
exposition of this Court in Raja Mechanical Company Private
40
Limited vs. Commissioner of Central Excise, DelhiI23. It is
well settled that rejection of delay application by the appellate
forum does not entail in merger of the assessment order with that
order.
21. Taking any view of the matter, therefore, 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.
22. Accordingly, we allow this appeal and set aside the
impugned judgment and order passed by the High Court and
dismiss the writ petition. There shall be no order as to costs.
Pending interlocutory applications, if any, shall stand disposed
of.
..................................J.
(A.M. Khanwilkar)
..................................J.
(Dinesh Maheshwari)
New Delhi;
May 6, 2020.
23 (2012) 12 SCC 613
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2413/2020
(Arising out of SLP(C) No. 12892/2019)
Assistant Commissioner (CT)
LTU, Kakinada & Ors. …Appellant(s)
Versus
M/s. Glaxo Smith Kline Consumer
Health Care Limited ...Respondent(s)
J U D G M E N T
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
Pradesh1
is: whether the High Court in exercise of its writ
jurisdiction under Article 226 of the Constitution of India ought
to entertain a challenge to the assessment order on the sole
1 For short, “the High Court”
2
ground that the statutory remedy of appeal against that order
stood foreclosed by the law of limitation?
3. The respondent is a registered dealer on the rolls of
Assistant Commissioner of Commercial Taxes, Large Tax Payer
Unit at Kakinada Division2
under the provisions of Andhra
Pradesh Value Added Tax Act, 20053
and the Central Sales Tax
Act, 19564
and is engaged in the business of manufacturing and
sale of Horlicks, Boost, Biscuits, Ghee, Ayurvedic Medicines etc.
The Assistant Commissioner had called upon the respondent to
produce books of accounts for the assessment year 201314 for
finalisation of assessment under the 1956 Act. The authorised
representative of the respondent produced declaration in Form
“F” in support of its claim that certain transactions are interState transfers. The information and declaration furnished by
the respondent was duly verified and after giving personal
hearing to the respondent, final assessment order came to be
passed by the Assistant Commissioner on 21.6.2017, raising
demand of Rs.76,73,197/ (Rupees seventy six lakhs seventy
three thousand one hundred ninety seven only) against turnover
2 For short, “the Assistant Commissioner”
3 For short, ”the 2005 Act”
4 For short, “the 1956 Act”
3
of Rs.3,44,15,240/ (Rupees three crores forty four lakhs fifteen
thousand two hundred forty only) on the finding that the
respondent had failed to submit Form “F” to the tune of the
turnover reported in the Central Sales Tax (CST) return. This
assessment order was duly served on the respondent on
22.6.2017. The respondent did not file appeal against this
assessment order within the statutory period. Instead, amount
equivalent to 12.5% of the demand was deposited on 12.9.2017.
The respondent then filed an application under Rule 60 of the
Andhra Pradesh Value Added Tax Rules, 20055
, highlighting the
error made in raising the demand based on incorrect turnover
reported by the respondent. This application was filed only on
8.5.2018, which came to be rejected by the Assistant
Commissioner vide order dated 11.5.2018. Aggrieved by the
decision dated 11.5.2018, the respondent filed an appeal before
the Appellate Deputy Commissioner of Commercial Taxes,
Vijayawada6
on 28.5.2018, which came to be rejected on
17.8.2018. It is only thereafter, the respondentassessee was
advised to file appeal before the Appellate Deputy Commissioner
5 For short, “the 2005 Rules”
6 For short, “the Appellate Deputy Commissioner” or “the appellate authority”, as the
case may be”
4
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 redo the assessment and reckon the correct Branch Transfer
turnover and grant exemption on the basis of Form “F”. The
respondent did not challenge the order passed by the Appellate
Deputy Commissioner, rejecting the statutory appeal preferred by
the respondent against the assessment order dated 21.6.2017,
5
for reasons best known to the respondent. The Division Bench of
the High Court, on 8.11.2018, noted that the respondent had
already paid 12.5% of the disputed tax, for the purpose of filing
an appeal. It also noted the stand taken by the respondent that
the employee who was in charge of the tax matters of the
respondent, had defaulted and was subsequently suspended in
contemplation of disciplinary proceedings, as a result of which
statutory appeal could not be filed within the prescribed time.
The Division Bench of the High Court directed the respondent to
pay an additional amount equivalent to 12.5% of the disputed tax
within one week and posted the matter for 19.11.2018. This was
an exparte order. The respondent, in terms of the stated order,
deposited an additional amount equivalent to 12.5% of the
disputed tax amount. The writ petition was then taken up for
hearing on 19.11.2018, when after hearing the counsel for the
parties, the writ petition came to be allowed and the order passed
by the Assistant Commissioner, dated 21.6.2017 has been
quashed and set aside and the respondent relegated before the
Assistant Commissioner for reconsideration of the matter afresh
after giving personal hearing to the respondent to explain the
discrepancies. This order has also noted that the respondent had
6
paid Rs.9,59,190/ (Rupees nine lakhs fiftynine thousand one
hundred ninety only) equivalent to the 12.5% of the taxes in the
year 201314 (CST) on 13.11.2018.
5. Feeling aggrieved, the appellants have filed the present
appeal. It is urged that the respondent having failed to avail of
statutory remedy of appeal within the prescribed time and also
because the delay in filing appeal had not been satisfactorily
explained, the High Court ought not to have entertained the writ
petition at the instance of such person and moreso, because the
respondent had allowed the order passed by the appellate
authority rejecting the appeal on the ground of delay to become
final. In substance, the argument is that the High Court
exceeded its jurisdiction and committed manifest error in setting
aside the assessment order dated 21.6.2017 passed by 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
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 was served on him,
appeal to such authority as may be prescribed:
Provided that the appellate authority may within a
further period of thirty days admit the appeal preferred
after a period of thirty days if he is satisfied that the VAT
dealer or TOT dealer or any other dealer had sufficient
cause for not preferring the appeal within that period:
Provided further that an appeal so preferred shall
not be admitted by the appellate authority concerned
unless the dealer produces the proof of payment of tax,
penalty, interest or any other amount admitted to be due,
or of such instalments as have been granted, and the
proof of payment of twelve and half percent of the
difference of the tax, penalty, interest or any other
amount, assessed by the authority prescribed and the
tax, penalty, interest or any other amount admitted by
the appellant, for the relevant tax period, in respect of
which the appeal is preferred.
8
(2) The appeal shall be in such form, and verified in
such manner, as may be prescribed and shall be
accompanied by a fee which shall not be less than
Rs.50/ (Rupees fifty only) but shall not exceed Rs.1000/
(Rupees one thousand only) as may be prescribed.
(3) (a) Where an appeal is admitted under subsection
(1), the appellate authority may, on an application filed by
the appellant and subject to furnishing of such security
or on payment of such part of the disputed tax within
such time as may be specified, order stay of collection of
balance of the tax under dispute pending disposal of the
appeal;
(b) Against an order passed by the appellate
authority refusing to order stay under clause (a), the
appellant may prefer a revision petition within thirty
days from the date of the order of such refusal to the
Additional Commissioner or the Joint Commissioner
who may subject to such terms and conditions as he
may think fit, order stay of collection of balance of the
tax under dispute pending disposal of the appeal by
the appellate authority;
(c) Notwithstanding anything in clauses (a) or (b),
where a VAT dealer or TOT dealer or any other dealer
has preferred an appeal to the Appellate Tribunal
under Section 33, the stay, if any, ordered under
clause (b) shall be operative till the disposal of the
appeal by such Tribunal, and, the stay, if any ordered
under clause (a) shall be operative till the disposal of
the appeal by 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.
9
(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 excluded, while
computing the period of two years specified in subsection
(4) for the purpose of passing appeal order under this
section.
(5) Before passing orders under subsection (4), the
appellate authority may make such enquiry as it deems
fit or remand the case to any subordinate officer or
authority for an inquiry and report on any specified point
or points.
(6) Every order passed in appeal under this section
shall, subject to the provisions of sections 32, 33, 34 and
35 be final.”
Going by the text of this provision, it is evident that the statutory
appeal is required to be filed within 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,
10
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 in the following
words:
“2. It is submitted that the impugned OrderinOriginal
dated 21.06.2017 was received by the Applicant on
22.06.2017 and the appeal ought to have been filed by
the applicant on 21.07.2017 in terms of section 31 of the
Andhra Pradesh VAT Act, 2005. Thus, there is delay in
filing the appeal. The Applicants further submits that the
delay is not due to any negligence on part of the
Applicant.
3. It is submitted that the impugned order was
received by Mr. P. Sriram Murthy, but the receipt of this
assessment order was not informed to any other person
of the company.
4. Mr. P. Sriram Murthy was authorized to handle day
to day affairs of sales tax (VAT), service tax and excise
and he was also authorized to sign and submit
documents with the tax departments, file periodic tax
returns and represent the company before Concerned tax
authorities.
5. However, the company has alleged Mr. P. Sriram
Murthy with committing 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.
11
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 the delay in filing the above
numbered appeal is not condoned, the Applicant would
be put to great injustice and irreparable injury. On the
other hand, no prejudice would be caused if the delay is
condoned.
WHEREFORE, it is prayed that the Ld. Appellate
Joint Commissioner (ST) be pleased to allow the
application for condonation of delay as prayed for.”
As stated in the application for condonation of delay in filing the
statutory appeal, the respondent caused to file affidavit of
Mr. Sreedhar Routh, son of Late Mr. R. Seetha Rama Swamy,
who was working as Site Director in the respondent company. In
this affidavit, in support of the application for condonation of
delay, it is averred thus:
“…..
That Mr. P. Sriram Murthy, Deputy ManagerFinance,
was authorized to handle day to day affairs of sales tax
(VAT), service tax and excise. He was also authorized to
sign and submit documents with the tax departments,
file periodic tax returns and represent the company
before concerned tax authorities.
that the CST assessment for the period 201314 was
completed by the Assistant Commissioner (CT) LTU
raising demand of Rs.76,73,197/ vide assessment order
dated 21.06.2017.
12
that the assessment order was received by Mr. P. Sriram
Murthy. But, the receipt of this assessment order was not
informed to any other person of the company.
that Mr. P. Sriram Murthy filed application under Rule 60
of the Andhra Pradesh Act, 2005 without informing the
company about such filing.
that Mr. P. Sriram Murthy also engaged a Chartered
Accountant and filed an appeal against rejection of
application filed under rule 60. The appointment of
Chartered Accountant and filing this appeal was also not
informed to the company.
that the company has alleged Mr. P. Sriram Murthy with
committing certain irregularities and initiated
disciplinary proceedings against him.
that Mr. P. Sriram Murthy has been suspended from his
official duties with effect from 26th July 2018.
Investigation in this matter is going on.
that it is only post his suspension that we have come to
know about the demand of Rs.76,73,197/ lakhs raised
vide CST assessment order for the year 20132014 and
therefore could not respond or take any action in respect
of this order/demand.
It is prayed that the Ld. Appellate Joint Commissioner
(ST) be pleased to allow the application 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 respondentassessee cannot be condoned, the
appellate authority observed thus:
13
“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 assessment order, the appellantdealer has filed a request letter before the assessing
authority for reassessment under rule 60 of APVAT
Rules, 2005. However, the AA has not considered reassessment request, and issued an endorsement
dt.11.05.2018, rejecting the reassessment request. The
appellant also filed an appeal on such endorsement. That
appeal petition based on endorsement has also not been
admitted in this office and rejected vide ADC’s orders no.
3470, dt. 17.08.2018. Therefore, cannot be assumed
under any circumstances, and by no stretch of
imagination that the appellantdealer was not aware of
the service of original assessment orders. Hence, it is to
be affirmed that the causes putforth for delay
condonation are not rational and against the facts of the
case. It is also relevant here to state that whatever may
be circumstances, the delay beyond 60 days could not be
condonable in the hands of the appellate authority,
therefore, such request primafacie is not in tune with
the provisions of the Act, hence, liable to be rejected.
From the aforesaid discussion, it is construed that no
favourable grounds can be made to admit the appeal,
since the appellant have failed to file appeal petition
within the prescribed time under APVAT Act, 2005. It is
also pertinent here to note that the Department has duly
served the original assessment order to the appellant
without any procedural lapse, and also the appellant has
admitted that the original orders were received on
22.06.2017.
In view of the above, since the appellant failed to prefer
an appeal on the original assessment order dated
21.06.2017, which was duly served on the appellant, and
14
as such the original assessment order has become final,
and the present appeal filed by the appellant on
24.09.2018 with a delay of 1 year 62 days, hence cannot
be admitted.
Further the appellants have not submitted any
valid reasons/sufficient cause for not preferring the
appeal within the prescribed & condonable time of
30+30=60 days of receipt of the original assessment
order. Hence the appeal petition is hereby REJECTED
as per the provisions of Section 31 of APVAT Act.”
(emphasis supplied)
The appellate authority was pleased to reject the explanation that
the respondent was not aware of the service of assessment order,
as it remained unsubstantiated by the respondent. When the
matter travelled to the High Court, the Division Bench, after
hearing the respondent, proceeded to pass an exparte 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.”
15
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
of India & Ors.7
.
9. We may advert to the assertions made in the writ petition
(on the basis of which the High Court was pleased to grant relief
to the respondent), to explain the delay in filing of the statutory
appeal including the reason why the respondent should be given
one opportunity. The same read thus:
“…..
7. From the above, it can be summarized that the total
disputed demand has arisen on account of two reasons.
Firstly, the 1st Respondent has considered the total
branch transfer turnover as per monthly CST returns
and ignored the revised turnover as per VAT 200B. Even
though, the such revised stock transfer value was
considered by the 1st Respondent while computing the
ITC credit as per rule 20 (8) of AP VAT act. Secondly,
receipt of excess forms on account of inclusion of value of
freebies, free samples etc. by receiving state while issuing
the F Forms. The 1st Respondent treated these excess F
Forms value as concealment by the petitioner and levied
tax even, on this branch transfer value duly covered by F
Forms which is [sic] grossly against the principle of law.
8. It is submitted that the order was served on the
petitioner on 22.6.2017 against which, the Petitioner
could have preferred appeal before the 2nd Respondent
within 30 days from the said date. Unfortunately, no
steps were taken to file any appeal within the due date
for the reason that the day to day affairs of the Sales Tax,
7 2018 (361) ELT 22(A.P.)
16
Service Tax and Excise Law was being handled by one
Mr. P. Sri Ram Murthy, who was working as Deputy
Manager (Finance) in the Company, who failed to take
‘appropriate steps to prefer an appeal within time, by his
negligence. Excepting Mr. P. Sri Ram Murthy, there was
no other person who was well conversant with the facts
and the steps to be taken against the assessment order.
The other person Mr. Siddhant Belgaonker, Senior
Manager (Finance) who attended the assessment hearing
also left the services of the Petitioner on 31.1.2018.
Consequently, the assessment order remained
uncontested.
9. It is respectfully submitted that apart from this act
of negligence, Mr. P. Sri Ram Murthy also committed
certain other irregularities over a period of one year,
which came to the light of the Management of the
Company in the month of July, 2018. Immediately,
disciplinary proceedings were initiated against him, by
issuing a notice on 26.7.2018 (ex. P3) 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 14A(10) of the CST (AP) Rules on 9.5.2018 (Ex. P4)
contending, interalia, that the revised value of stock
transfer as per VAT 200B should have been considered
instead of Rs.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 200B at the end of the year. The
ITC credit under VAT was also allowed by the 1st
Respondent, considering the stock transfer turnover as
Rs.863,33,95,259/. In the said representation, it was
contended that the turnover of Rs.1,85,03,360/, could
not have been levied with the tax since it is admittedly
covered by ‘F’ forms.
12. The representation of the Petitioner under Rule 60
was rejected by the 1st Respondent, by endorsement,
dated 11.5.2018 (Ex. P5) on the ground, that it is not a
case for considering it as a mistake rectifiable under Rule
60. It is also submitted that Mr. P. Sri Ram Murthy
17
appear to have filed an appeal against the endorsement of
the 1st Respondent dated 11.5.2018 to 2nd Respondent on
28.5.2018. This was also without knowledge of the
petitioner’s management.
13. It is submitted that the Petitioner was not aware of
these developments till the misdeeds of Mr. P. Sri Ram
Murthy were being enquired into. It is submitted that Mr.
P. Sri Ram Murthy has in fact, remitted an amount of
Rs.9,59,150/ being 12.5% of the disputed tax in the
assessment order online, on 12.9.2017 (Ex. P6). The
payment was made as if it is towards miscellaneous tax
payment for June, 2014. When the Petitioner was seeking
to reconcile as to how this amount was deposited and
under what account it came to known it is for the
purpose of preferring an appeal against the impugned
order. All this verification happened post suspension of
Mr. P. Sri Ram Murthy.
14. The Petitioner faced with this unfortunate situation,
filed an appeal under Section 31 of the VAT Act on
24.9.2018 on the bona fide belief that there are good
grounds for condonation of the delay since the Petitioner
cannot suffer for the errors committed by one of its
employees.
15. It is submitted that the 2nd Respondent, vide order,
dated 25.10.2018 (Ex. P7), rejected the appeal on the
ground that he has no power to condone the delay
beyond 30 days. It is also observed in the said order that
appeal against the Endorsement was also dismissed by
him on 17.8.2018. However, copy of the order is not yet
served on the petitioner. The 2nd Respondent observed
that the Petitioner cannot dispute the service of
assessment order on 22.6.2017 and failure to file the
appeal within 60 days would mean that the assessment
order has attained finality.
16. The petitioner submits that filing of a further appeal
to the APVAT Appellate Tribunal at Visakhapatnam is a
futile exercise, since as a creature under the Act, the
Tribunal cannot find fault with the 2nd Respondent for not
condoning the delay beyond 30 days.
17. The petitioner has lost the appellate remedy by
efflux of time. It does not mean that the Petitioner should
be left 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,
18
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
impressed by the contention pressed into service by the
respondent that it ought to be given one opportunity to explain to
the authority (Assistant Commissioner) about the discrepancies
between the value reported in the CST returns and the amount
indicated in Form “F” relating to the turnover. The additional
19
reason as can be discerned from the impugned order is that the
respondent had already deposited an additional amount
equivalent to 12.5% of the disputed tax amount in terms of the
earlier order. We deem it apposite to reproduce the impugned
order of the High Court. The same reads thus:
“…..
The impugned order of assessment is dated 21.6.2017.
As against the said order the petitioner filed an appeal
with a delay. Since the delay was beyond the period after
which it can be condoned, the same was not entertained.
Therefore, the petitioner has come up with the above writ
petition.
The reason stated by the petitioner is that one of the
employees who was in charge, indulged in malpractices
forcing the management to suspend him and initiate
disciplinary proceedings. The petitioner claims that they
were not aware of these orders. Therefore, the petitioner
seeks one opportunity.
The reason why the petitioner seeks one opportunity is
that ‘F’ forms submitted by the petitioner were rejected by
the Assessing Officer, on the ground that the value of the
goods transferred to branch office have not been
disclosed in ‘F’ forms. But the claim of the petitioner is
that the value was wrongly reported in the CST returns
and that the amount indicated in the ‘F’ forms was more
than the turnover. Therefore, they seek one opportunity
to explain this discrepancy.
In view of the peculiar circumstances, even while
granting an opportunity to the petitioner, we wanted to
put them on condition. Therefore, on 8.11.2018 we
passed an interim order to the following effect,
“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
20
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.”
Pursuant to the aforesaid order, the petitioner made
payment of Rs.9,59,190/, representing 12.5% of the
taxes for the year 20132014 (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
1
st 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 res integra. Even though the High Court can
entertain a writ petition against any order or direction
passed/action taken by the State under Article 226 of the
Constitution, it ought not to do so as a matter of course when the
21
aggrieved person could have availed of an effective alternative
remedy in the manner prescribed by law (see Baburam Prakash
Chandra Maheshwari vs. Antarim Zila Parishad now Zila
Parishad, Muzaffarnagar8 and also Nivedita Sharma vs.
Cellular Operators Association of India & Ors.9
). In
Thansingh Nathmal & Ors. vs. Superintendent of Taxes,
Dhubri & Ors.10, the Constitution Bench of this Court made it
amply clear that although the power of the High Court under
Article 226 of the Constitution is very wide, the Court must
exercise selfimposed restraint and not entertain the writ petition,
if an alternative effective remedy is available to the aggrieved
person. In paragraph 7, the Court observed thus:
“7. Against the order of the Commissioner an order for
reference could have been claimed if the appellants
satisfied the Commissioner or the High Court that a
question of law arose out of the order. But the procedure
provided by the Act to invoke the jurisdiction of the High
Court was bypassed, the appellants moved the High
Court challenging the competence of the Provincial
Legislature to extend the concept of sale, and invoked the
extraordinary jurisdiction of the High Court under Article
226 and sought to reopen the decision of the Taxing
Authorities on question of fact. The jurisdiction of the
High Court under Article 226 of the Constitution is
couched in wide terms and the exercise thereof is not
subject to any restrictions except the territorial
restrictions which are expressly provided in the Articles.
8 AIR 1969 SC 556
9 (2011) 14 SCC 337
10 AIR 1964 SC 1419
22
But the exercise of the jurisdiction is discretionary: it
is not exercised merely because it is lawful to do so.
The very amplitude of the jurisdiction demands that
it will ordinarily be exercised subject to certain selfimposed limitations. Resort that jurisdiction is not
intended as an alternative remedy for relief which
may be obtained in a suit or other mode prescribed by
statute. Ordinarily the Court will not entertain a
petition for a writ under Article 226, where the
petitioner has an alternative remedy, which without
being unduly onerous, provides an equally efficacious
remedy. 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.11
,
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 statute must only be availed of. In
paragraph 11, the Court observed thus:
11 (1983) 2 SCC 433
23
“11. Under the scheme of the Act, there is a hierarchy of
authorities before which the petitioners can get adequate
redress against the wrongful acts complained of. The
petitioners have the right to prefer an appeal before the
Prescribed Authority under subsection (1) of Section 23
of the Act. If the petitioners are dissatisfied with the
decision in the appeal, they can prefer a further appeal to
the Tribunal under subsection (3) of Section 23 of the
Act, and then ask for a case to be stated upon a question
of law for the opinion of the High Court under Section 24
of the Act. The Act provides for a complete machinery
to challenge an order of assessment, and the
impugned orders of assessment can only be
challenged by the mode prescribed by the Act and not
by a petition under Article 226 of the Constitution. It
is now well recognised that where a right or liability
is created by a statute which gives a special remedy
for enforcing it, the remedy provided by that statute
only must be availed of. This rule was stated with great
clarity by Willes, J. in Wolverhampton New Waterworks
Co. v. Hawkesford [(1859) 6 CBNS 336, 356] in the
following passage:
There are three classes of cases in which a
liability may be established founded upon
statute. . . . But there is a third class, viz.
where a liability not existing at common law is
created by a statute which at the same time
gives a special and particular remedy for
enforcing it…. The remedy provided by the
statute must be followed, and it is not
competent to the party to pursue the course
applicable to cases of the second class. The
form given by the statute must be adopted and
adhered to.
The rule laid down in this passage was approved by the
House of Lords in Neville v. London Express Newspapers
Ltd. (1919 AC 368) and has been reaffirmed by the Privy
Council in AttorneyGeneral of Trinidad and
Tobago v. Gordon Grant & Co. Ltd. (1935 AC 532)
and Secretary of State v. Mask & Co. (AIR 1940 PC 105).
It has also been held to be equally applicable to
enforcement of rights, and has been followed by this
Court throughout. The High Court was therefore justified
in dismissing the writ petitions in limine.”
24
(emphasis supplied)
In the subsequent decision in Mafatlal Industries Ltd. & Ors.
vs. Union of India & Ors.12, 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
12 (1997) 5 SCC 536
25
render the statutory provision otiose. In a recent decision of a
threeJudge Bench of this Court in Oil and Natural Gas
Corporation Limited vs. Gujarat Energy Transmission
Corporation Limited & Ors.13, the statutory appeal filed before
this Court was barred by 71 days and the maximum time limit
for condoning the delay in terms of Section 125 of the Electricity
Act, 2003 was only 60 days. In other words, the appeal was
presented beyond the condonable period of 60 days. As a result,
this Court could not have condoned the delay of 71 days.
Notably, while admitting the appeal, the Court had condoned the
delay in filing the appeal. However, at the final hearing of the
appeal, an objection regarding appeal being barred by limitation
was allowed to be raised being a jurisdictional issue and while
dealing with the said objection, the Court referred to the
decisions in Singh Enterprises vs. Commissioner of Central
Excise, Jamshedpur & Ors.14, Commissioner of Customs and
Central Excise vs. Hongo India Private Limited & Anr.15
,
Chhattisgarh State Electricity Board vs. Central Electricity
13 (2017) 5 SCC 42
14 (2008) 3 SCC 70
15 (2009) 5 SCC 791
26
Regulatory Commission & Ors.16 and Suryachakra Power
Corporation Limited vs. Electricity Department represented
by its Superintending Engineer, Port Blair & Ors.17 and
concluded that Section 5 of the Limitation Act, 1963 cannot be
invoked by the Court for maintaining an appeal beyond
maximum prescribed period in Section 125 of the Electricity Act.
13. The principle underlying the dictum in this decision would
apply proprio vigore to Section 31 of the 2005 Act including to the
powers of the High Court under Article 226 of the Constitution.
Notably, in this decision, a submission was canvassed by the
assessee that in the peculiar facts of that case (as urged in the
present case), the Court may exercise its jurisdiction under
Article 142 of the Constitution, so that complete justice can be
done. This argument has been considered and plainly rejected in
the following words:
“12. In A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602,
while explicating and elaborating the principles under
Article 142, Sabyasachi Mukharji, J. (as his Lordship
then was) opined thus: (SCC p. 656, para 50)
“50. … The fact that the rule was discretionary
did not alter the position. Though Article 142(1)
empowers the Supreme Court to pass any order
to do complete justice between the parties, the
16 (2010) 5 SCC 23
17 (2016) 16 SCC 152
27
court cannot make 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.
100203, 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 provisions of the relevant
statutory laws. The court therefore, held that it
was not possible to hold that Article 142(1)
conferred upon this Court powers which could
contravene the provisions of Article 32.”
(emphasis in original)
13. The said decision has been clarified by a
Constitution Bench in Union Carbide Corpn. v. Union of
India, (1991) 4 SCC 584, wherein M.N. Venkatachaliah,
J. (as his Lordship then was) speaking for the majority,
ruled that: (SCC pp. 63435, para 83)
“83. It is necessary to set at rest certain
misconceptions in the arguments touching the
scope of the powers of this Court under Article
142(1) of the Constitution. These issues are
matters of serious public importance. The
proposition that a provision in any ordinary law
irrespective of the importance of the public
policy on which it is founded, operates to limit
28
the powers of the Apex Court under Article
142(1) is unsound and erroneous. In both Prem
Chand Garg v. Excise Commr., AIR 1963 SC
996, as well as A.R. Antulay v. R.S. Nayak,
(1988) 2 SCC 602, cases the point was one of
violation of constitutional provisions and
constitutional rights. The observations as to the
effect of inconsistency with statutory provisions
were really unnecessary in those cases as the
decisions in the ultimate analysis turned on the
breach of constitutional rights. We agree with
Shri Nariman that the power of the Court under
Article 142 insofar as quashing of criminal
proceedings are concerned is not exhausted by
Section 320 or 321 or 482 CrPC or all of them
put together. The power under Article 142 is at
an entirely different level and of a different
quality. Prohibitions or limitations or provisions
contained in ordinary laws cannot, ipso facto,
act as prohibitions or limitations on the
constitutional powers under Article 142. Such
prohibitions or limitations in the statutes might
embody and reflect the scheme of a particular
law, taking into account the nature and status
of the authority or the court on which
conferment of powers — limited in some
appropriate way — is contemplated. The
limitations may not necessarily reflect or be
based on any fundamental considerations of
public policy. Shri Sorabjee, learned Attorney
General, referring to Garg case [Prem Chand
Garg v. Excise Commr., AIR 1963 SC 996], said
that limitation on the powers under Article 142
arising from “inconsistency with express
statutory 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
29
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 justice” of a cause or matter
and in the ultimate analysis of the propriety of
the exercise of the power. No question of lack of
jurisdiction or of nullity can arise.”
(emphasis in original)
14. In this regard, another Constitution Bench
in Supreme Court Bar Assn. v. Union of India, (1998) 4
SCC 409] opined: (SCC pp. 43738, para 56)
“56. As a matter of fact, the observations
on which emphasis has been placed by us from
the Union Carbide case [Union Carbide
Corpn. v. Union of India, (1991) 4 SCC
584], A.R. Antulay case [A.R. Antulay v. R.S.
Nayak, (1988) 2 SCC 602] and Delhi Judicial
Service Assn. v. State of Gujarat, (1991) 4 SCC
406, go to show that they do not strictly
speaking come into any conflict with the
observations of the majority made in Prem
Chand Garg case [Prem Chand Garg v. Excise
Commr., AIR 1963 SC 996]. It is one thing to
say that “prohibitions or limitations in a
statute” cannot come in the way of exercise of
jurisdiction under Article 142 to do complete
justice between the parties in the pending
“cause or matter” arising out of that statute,
but quite a different thing to say that while
exercising jurisdiction under Article 142, this
Court can altogether ignore the substantive
provisions of a statute, dealing with the subject
and pass orders concerning an issue which can
be settled only through a mechanism prescribed
30
in another statute. This Court did not say so
in Union Carbide case [Union Carbide
Corpn. v. Union of India, (1991) 4 SCC 584]
either expressly or by implication and on the
contrary it has been held that the Apex
Court will take note of the express provisions of
any substantive statutory law and regulate the
exercise of its power and discretion accordingly.
…”
(emphasis in original)
15. From the aforesaid decisions, it is clear as crystal
that the Constitution Bench in Supreme Court Bar
Assn. v. Union of India, (1998) 4 SCC 409, has ruled that
there is no conflict of opinion in Antulay case [A.R.
Antulay v. R.S. Nayak, (1988) 2 SCC 602] or in Union
Carbide Corpn. case [Union Carbide Corpn. v. Union of
India, (1991) 4 SCC 584] with the principle set down
in Prem Chand Garg v. Excise Commr., AIR 1963 SC 996.
Be it noted, when there is a statutory command by
the legislation as regards limitation and there is the
postulate that delay can be condoned for a further
period not exceeding sixty days, needless 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
31
uncondonable and it cannot be condoned taking
recourse to Article 142 of the Constitution.
16. We had stated earlier that we will be adverting to
the passage in Suryachakra Power Corpn.
Ltd. v. Electricity Deptt., (2016) 16 SCC 152. There, the
Court had referred to Section 14 of the Limitation Act. It
fundamentally relied on M.P. Steel Corpn. v. CCE, (2015)
7 SCC 58, wherein the Court after referring to certain
authorities, analysed thus: (M.P. Steel Corpn. Case), SCC
p. 91, para 43)
“43. … when a certain period is excluded by
applying the principles contained in Section 14,
there is no delay to be attributed to the
appellant and the limitation period provided by
the statute concerned continues to be the stated
period and not more than the stated period. We
conclude, therefore, that the principle of Section
14 which is a principle based on advancing the
cause of justice would certainly apply to exclude
time taken in prosecuting proceedings which are
bona fide and with due diligence pursued, which
ultimately end without a decision on the merits
of the case.””
(emphasis in italics – in original, and in bold – supplied)
Similarly, in State vs. Mushtaq Ahmad & Ors.18, this Court
opined that where minimum sentence is provided for an offence
then no Court can impose lesser punishment on ground of
mitigating factors.
14. A priori, we have no hesitation in taking the view that what
this Court cannot do in exercise of its plenary powers under
Article 142 of the Constitution, it is unfathomable as to how the
High Court can take a different approach in the matter in
18 (2016) 1 SCC 315
32
reference to Article 226 of the Constitution. The principle
underlying the rejection of such argument by this Court would
apply on all fours to the exercise of power by the High Court
under Article 226 of the Constitution.
15. We may now revert to the Full Bench decision of the Andhra
Pradesh High Court in Electronics Corporation of India Ltd.
(supra), which had adopted the view taken by the Full Bench of
the Gujarat High Court in Panoli Intermediate (India) Pvt. Ltd.
vs. Union of India & Ors.19 and also of the Karnataka High
Court in Phoenix Plasts Company vs. Commissioner of
Central Excise (AppealI), Bangalore20. The logic applied in
these decisions proceeds on fallacious premise. For, these
decisions are premised on the logic that 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
19 AIR 2015 Guj 97
20 2013 (298) ELT 481 (Kar.)
33
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 nonsuit 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 course. Doing so would be in the teeth of
the principle underlying the dictum of a threeJudge Bench of
this Court in Oil and Natural Gas Corporation Limited
(supra). In other words, the fact that the High Court has wide
powers, does not mean that it would issue a writ which may be
inconsistent with the legislative intent regarding the dispensation
explicitly prescribed under Section 31 of the 2005 Act. That
would render the legislative scheme and intention behind the
stated provision otiose.
34
16. The respondent had relied on the decision of this Court in
K.S. Rashid & Son vs. the Income Tax Investigation
Commission21. This decision of the Constitution Bench, no
doubt, deals with the extent of power of the High Court under
Article 226 of the Constitution and the situation when the High
Court can refuse to exercise its discretion, such as when
alternative efficacious remedy is available to the aggrieved party.
In paragraph 4 (last paragraph) of this decision, however, the
Court plainly noted that it was not necessary to express any final
opinion on the question as to whether Section 8(5) of the
Taxation on Income (Investigation Commission) Act, 1947 (Act
XXX of 1947) is to be regarded as providing the only remedy
available to the aggrieved party and that it excludes altogether
the remedy provided for under Article 226 of the Constitution.
17. Reliance was then placed on a threeJudge Bench decision
of this Court in ITC Ltd. & Anr. Vs. Union of India22. In that
case, the High Court had dismissed the writ petition on the
ground that the petitioner therein had an adequate alternative
remedy by way of an appeal under Section 35 of the Central
21 AIR 1954 SC 207
22 (1998) 8 SCC 610
35
Excise Act. Concededly, this Court was pleased to uphold that
opinion of the High Court. However, whilst considering the
difficulty expressed by the petitioner therein that the statutory
remedy of appeal had now become time barred during the
pendency of the proceedings before the High Court and before
this Court, the Court permitted the petitioner therein to resort to
remedy of statutory appeal and directed the appellate authority
to decide the appeal on merits. This obviously was done on the
basis of concession given by the counsel appearing for the
Revenue as noted in paragraph 2(1) of the order, which reads
thus:
“2. The High Court has dismissed the writ petition filed
by the petitioner 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
36
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
ground that it is barred by time. In view of
this direction and concession, the petitioner
will have an effective alternative remedy by
way of an appeal.
(emphasis supplied)
In that case, it appears that the writ petition was filed within
statutory period and legal remedy was being pursued in good
faith by the assessee (appellant).
18. Suffice it to observe that this decision is on the facts of that
case and cannot be cited as a precedent in support of an
argument that the High Court is free to entertain the writ petition
assailing the assessment order even if filed beyond the statutory
period of maximum 60 days in filing appeal. The remedy of
appeal is creature of statute. If the appeal is presented by the
assessee beyond the extended statutory limitation period of 60
days in terms of Section 31 of the 2005 Act and is, therefore, not
entertained, it is incomprehensible as to how it would become a
case of violation of fundamental right, much less statutory or
legal right as such.
37
19. Arguendo, reverting to the factual matrix of the present
case, it is noticed that the respondent had asserted that it was
not aware about the passing of assessment order dated
21.6.2017 although it is admitted that the same was served on
the authorised representative of the respondent on 22.6.2017.
The date on which the respondent became aware about the order
is not expressly stated either in the application for condonation of
delay filed before the appellate authority, the affidavit filed in
support of the said application or for that matter, in the memo of
writ petition. On the other hand, it is seen that the amount
equivalent to 12.5% of the tax amount came to be deposited on
12.9.2017 for and on behalf of respondent, without filing an
appeal and without any demur after the expiry of statutory
period of maximum 60 days, prescribed under Section 31 of the
2005 Act. Not only that, the respondent filed a formal application
under Rule 60 of the 2005 Rules on 8.5.2018 and pursued the
same in appeal, which was rejected on 17.8.2018. Furthermore,
the appeal in question against the assessment order came to be
filed only on 24.9.2018 without disclosing the date on which the
respondent in fact became aware about the existence of the
assessment order dated 21.6.2017. On the other hand, in the
affidavit of Mr. Sreedhar Routh, Site Director of the respondent
38
company (filed 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 presupposes 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 amount in terms of the
previous order passed by it. That reason can have no bearing on
the justification for nonfiling of the appeal within the statutory
39
period. Notably, the respondent had relied on the affidavit of the
Site Director and no affidavit of the concerned employee (P.
Sriram Murthy, Deputy ManagerFinance) or at least the other
employee [Siddhant Belgaonker, Senior Manager (Finance)], who
was associated with the erring employee during the relevant
period, has been filed in support of the stand taken in the
application for condonation of delay. Pertinently, no finding has
been recorded by the High Court that it was a case of violation of
principles of natural justice or noncompliance of statutory
requirements 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.
20. Reverting to the contention that the respondent having
failed to assail the order passed by the appellate authority, dated
25.10.2018 rejecting the application for condonation of delay, the
assessment order passed by the Assistant Commissioner, dated
21.6.2017 stood merged, need not detain us in view of the
exposition of this Court in Raja Mechanical Company Private
40
Limited vs. Commissioner of Central Excise, DelhiI23. It is
well settled that rejection of delay application by the appellate
forum does not entail in merger of the assessment order with that
order.
21. Taking any view of the matter, therefore, 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.
22. Accordingly, we allow this appeal and set aside the
impugned judgment and order passed by the High Court and
dismiss the writ petition. There shall be no order as to costs.
Pending interlocutory applications, if any, shall stand disposed
of.
..................................J.
(A.M. Khanwilkar)
..................................J.
(Dinesh Maheshwari)
New Delhi;
May 6, 2020.
23 (2012) 12 SCC 613
