Skip to content


Hindustan Aeronautics Limited (Koraput Division) Vs. State of Orissa and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax;Limitation
CourtOrissa High Court
Decided On
Case NumberO.J.C. Nos. 483 to 493 of 1976
Judge
Reported in[1976]38STC538(Orissa)
AppellantHindustan Aeronautics Limited (Koraput Division)
RespondentState of Orissa and anr.
Appellant AdvocateY.S.N. Murty, Adv.
Respondent AdvocateThe Standing Counsel (C.T.)
DispositionApplication allowed
Cases ReferredBaldeo Lal Roy v. State of Bihar
Excerpt:
.....of sales tax, berhampur. notwithstanding the fact that time was fast running out, the additional state representative to whom the papers were endorsed sat over the matter till 13th may, 1974. the learned member of the tribunal dealing with the matter has observed: law is settled that when limitation sets in, acceptable explanation for every day's delay has to be furnished and it must be held in the facts of the case that the state of orissa failed to offer explanation for the long delay beyond llth january, 1974, till 28th may, 1974, in the matter of filing of the appeal. if the activities of the additional state representative were to be controlled by some higher authority, he should have been approached by the additional state representative if he had experienced difficulty in the..........1973, the said assistant commissioner suggested that second appeals should be preferred, the state representative studied the papers available and required the other records vide his noting of 3rd december, 1973. a special messenger was sent to obtain the appellate as also the original assessment records on 4th december, 1973. the records were, however, received only on 6th january, 1974. the additional state representative was entrusted with the records received on 6th january, 1974, and it was only on 13th may, 1974, after making a detailed study that he suggested that second appeals be filed. approval was given by the state representative on 16th may, 1974, and after requisite processing, second appeals were filed an 28th may, 1974.7. before the member, sales tax tribunal, a.....
Judgment:

R.N. Misra, J.

1. These are eleven applications by M/s. Hindustan Aeronautics Limited (Koraput Division) -- a Government of India undertaking under the Ministry of Defence -- asking for writs of certiorari to quash a common order passed by the Sales Tax Tribunal of Orissa in the matter of condonation of delay in preferring eleven second appeals under the Orissa Sales Tax Act (hereinafter referred to as the 'Act') against the orders of the Assistant Commissioner of Sales Tax, Ganjam Range at Berhampur, setting aside assessments made by the Sales Tax Officer of Koraput I Circle at Jeypore.

2. When the Sales Tax Officer initiated assessment proceedings under the Act, the petitioner-company took the stand that it was engaged in the manufacture of aero engines for the MIG fighter planes for the Union Government and delivery of the aero engines to the Government of India did not constitute 'sale'. Therefore, the petitioner was not a dealer and the Sales Tax Officer had no jurisdiction to make any assessment. The stand of the petitioner-company was overruled and assessments were completed for different periods, treating the petitioner as an unregistered dealer. Heavy penalties were imposed under Section 12(5) of the Act.

3. The petitioner appealed to the Assistant Commissioner of Sales Tax, who came to uphold the contention of the petitioner that the transac tion did not constitute 'sale' and, therefore, the petitioner had no liability under the Act. The demands of tax and penalty were thus vacated.

4. The appellate orders were received by the appropriate authority under the Act on 12th November, 1973, and second appeals were preferred before the Tribunal by the State of Orissa on 28th May, 1974. Under Section 23(3)(a) of the Act, second appeals are preferable within a period of sixty days. There was thus a total delay of 137 day sin preferring the second appeals. Applications were filed under the proviso to Section 23(3)(a) of the Act for admitting the appeals though filed beyond time as the appellant had sufficient cause for not preferring the appeals within the prescribed period. Both parties were heard on the question of limitation and on 19th March, 1976, the Tribunal condoned the delay and directed the appeals to be admitted. This order of the Tribunal condoning the delay is assailed in these proceedings.

5. It is conceded before us that the proviso to Section 23(3)(a) of the Act is in terms similar to Section 5 of the Limitation Act and the power is discretionary. It is well-settled that when discretion vests in a judicial or quasi-judicial authority, it has to be exercised in accordance with the well-settled principles of justice and not in an arbitrary manner. It is equally well- settled that when discretionary jurisdiction has been exercised in favour of a party, the same should not be lightly interfered with and much less in a writ proceeding. While not disputing these propositions, Mr. Murty for the petitioner contends that the impugned order is vitiated by arbitrariness, and jurisdiction has been exercised by assuming facts which are not on record.

6. We extract below the whole of one of the applications filed on behalf of the State for condoning the delay :

1. That the first appeal orders for the year 1970-71 were received on 7th January, 1974, in the office of the Commissioner of Commercial Taxes, Orissa.

2. That there has been unavoidable delay of 81 days in filing of the second appeals.

3. That the delay was unavoidable because of inevitable processing in the office in getting the records from the office of the Sales Tax Officer, Jeypore, as well as from the office of the Assistant Commissioner of Sales Tax, Berhampur.

4. That as the amounts of tax involved in dispute are quite substan tial, a conscientious examination had to be ensured before filing of these appeals.

Prayer. -- It is, therefore, prayed that the delay in these cases of 81 days may be condoned as a very special case as the points involved are points of law to be decided.

A detailed objection was filed on behalf of the assessee. Thereafter, a rejoinder was filed on behalf of the State wherein it was claimed that there was never any inaction or lack of bona fides on the part of the State in preferring the second appeals. The delay was admitted to be of 128 days (though in fact the delay is of 137 days) notwithstanding the assertion in the original application of delay of 81 days. It was explained that the first appellate order was placed on 14th November, 1973, before an Assistant Commissioner of Commercial Taxes, who was allotted with the work of making scrutiny of the first appellate orders for the purpose of considering proposal of preferring of second appeals. On 27th November, 1973, the said Assistant Commissioner suggested that second appeals should be preferred, The State Representative studied the papers available and required the other records vide his noting of 3rd December, 1973. A special messenger was sent to obtain the appellate as also the original assessment records on 4th December, 1973. The records were, however, received only on 6th January, 1974. The Additional State Representative was entrusted with the records received on 6th January, 1974, and it was only on 13th May, 1974, after making a detailed study that he suggested that second appeals be filed. Approval was given by the State Representative on 16th May, 1974, and after requisite processing, second appeals were filed an 28th May, 1974.

7. Before the Member, Sales Tax Tribunal, a decision of the Patna High Court in the case of Baldeo Lal Roy v. State of Bihar [1960] 11 S.T.C. 104. was cited, wherein it had been said :

In order that one can claim to get the delay condoned, he must show by his conduct that he was diligent all along in taking appropriate steps and the delay was caused notwithstanding his due diligence. If, however, it appears that an applicant is not diligent but is guilty of laches and negligence and does not take appropriate steps for pursuing his remedy till about the close of the period prescribed for an action to be taken, he cannot claim to have the delay condoned if per chance or by accident he happened to have exceeded the prescribed period in taking the proper steps

Both sides concede and we do not dispute that the position of law has been appropriately stated in the aforesaid case. It is not disputed before us by the learned standing counsel that there has been a total delay of 137 days. From a chart of chronological events placed by the learned standing counsel before us, we find that though a special messenger was deputed for obtaining the records from the Sales Tax Officer and the first appellate authority on 4th December, 1973, the records could not be brought until 6th January, 1974. These records were to be received either from Jeypore in the District of Koraput or from Berhampur in the District of Ganjam. Berhampur is at a distance of 120 miles from Cuttack while Jeypore is a little more than double of the said distance. Between Cuttack and these two places, daily bus service is available. Besides, Berhampur is connected by train service. No material has been placed to justify the delay of a month in the receipt of the records and this aspect of the matter has not at all received consideration in the hands of the Tribunal. In view of the fact that sixty days time is available to prefer second appeal, the appeals if filed on llth January, 1974, would have been in time. After the records were received on 6th January, 1974, time was still available to prefer appeals within the period of limitation. Notwithstanding the fact that time was fast running out, the Additional State Representative to whom the papers were endorsed sat over the matter till 13th May, 1974. The learned Member of the Tribunal dealing with the matter has observed: --

The aforesaid narration of facts will show that the appellant through its officers were thoroughly diligent in taking steps for filing second appeals, and so the principle enunciated in the Patna decision [1960] 11 S.T.C. 104, referred to above, is squarely attracted. The only possible objection is that the Additional State Representative No. I took about 5 months to study the facts and law before he could put in writing to prefer second appeals. It all depended on the capacity and mental equipment of the officer concerned. If the officer was really capable and had thorough knowledge in law and facts, he could have submitted his opinion at a very early date. But ife on the other hand, the officer was of average type and had Co take lot of time for study the law and facts, delay was inevitable. Perhaps the Additional State Representative No. I belonged to the latter category and for his incapacity the appellant cannot, in my view, be made in any way responsible for saying that it lacked diligence.

There was no material before the Tribunal that the Additional State Representative was incapable and lacked thorough knowledge in law and facts. It was not known to the Tribunal as to who was the Additional State Representative No. I to whom the papers had been entrusted. The original application for limitation or the rejoinder was not supported by affidavit. The particular officer, on whose shoulders the responsibility is now being placed, did not choose to file any affidavit explaining the reason as to why he required more than four months' time to come to the conclusion that second appeals should be preferred. It was not for the Tribunal to assume that the Additional State Representative No. I lacked capacity and, if the officer indeed lacked capacity, it was for the appropriate authority concerned not to entrust such supposed heavy and complicated matter for being processed by him. The conclusion of the Tribunal that, in the facts of the case, the authorities of the State Government cannot be said to be lacking diligence is a conclusion which no reasonable person versed in law can come to. By judging the matter by application of tests in accord with human probability, the conclusion of the Tribunal cannot be sustained. Law is settled that when limitation sets in, acceptable explanation for every day's delay has to be furnished and it must be held in the facts of the case that the State of Orissa failed to offer explanation for the long delay beyond llth January, 1974, till 28th May, 1974, in the matter of filing of the appeal. As we have already pointed out, more than a month's time for obtaining the record need not have been taken if minimum diligence was exercised. On the average application of diligence the decision to prefer second appeals need not have taken four months to reach. If the activities of the Additional State Representative were to be controlled by some higher authority, he should have been approached by the Additional State Representative if he had experienced difficulty in the matter of reaching a conclusion and even if such authority had not been approached, on his own initiative he should have exercised appropriate control to see that the matter was processed in good time.

8. When a statute prescribes a period of limitation it is not without any meaning and when the time prescribed for an action runs out, the adversary is entitled to assume that the decision in his favour has come to stand so that such party would work out his activities accordingly. We must say that the Tribunal disposed of the matter in a very imprudent way.

9. For the reasons indicated above, we quash the order of the Tribunal. The writ applications are accordingly allowed. Normally we would have awarded costs, but in view of the fact that the litigating parties are in fact the Union of India and the State Government, we think it appropriate to make no order for costs.

K.B. Panda, J.

10. I agree


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //