COMMISSIONER (CT) LTU KAKINADA & ORS. versus M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED
[2020] 4 S.C.R. 602, Supreme Court of India, 2020
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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ASSISTANT COMMISSIONER (CT) LTU KAKINADA & ORS.
v.
M/S. GLAXO SMITH KLINE CONSUMER
HEALTH CARE LIMITED
(Civil Appeal No. 2413 of 2020)
MAY 06, 2020
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Constitution of India:
Art. 226 – Jurisdiction under – Scope of – Assessment under
Andhra Pradesh Value Added Tax Act, 2005 – Appeal against
assessment order filed beyond limitation period with application
for condonation of delay – Appeal dismissed as barred by limitation
– Writ Petition u/Art. 226 seeking to quash the assessment order –
High Court quashed the assessment order relegating the assessee
to Assessing Officer for reconsideration of the matter afresh –
Appeal to Supreme Court – Held: Where a right or liability is created
by a statute, giving a special remedy for enforcing it, remedy
provided by the statute only must be availed of – The wide jurisdiction
of High Court provided u/Art. 226, does not mean that it can pass
order in disregard of the substantive provisions of a statute – The
statutory appeal was filed beyond the total 60 days’ period specified
in s.31 of 2005 Act – The appellate authority is not empowered to
condone delay of the aggregate period of 60 days – Since the
statutory period specified for filing the appeal had expired and
appeal was filed without substantiating the ground for delay in filing
the appeal, no indulgence could be shown to the assessee – the writ
petition deserved to be rejected at
the threshold.
Doctrine:
Doctrine of merger – Rejection of condonation of delay
application by appellate forum does not entail in merger of the
assessment order with that order.
Allowing the appeal, the Court
HELD: 1. It is evident from s. 31 of Andhra Pradesh Value
Added Tax Act, 2005 that the statutory appeal is required to be
[2020] 4 S.C.R. 602
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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, the appeal was filed way beyond the total 60
days’ period specified in terms of Section 31 of the 2005 Act.
[Para 8][614-D-F]
2. 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, and that the delay beyond the
period of 60 days from the date of service of the assessment
order on the respondent-assessee cannot be condoned.
[Para 8][617-B]
3. The High Court finally allowed the writ petition 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 reason as can be discerned from the impugned
order is that the respondent had already deposited an additional
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amount equivalent to 12.5% of the disputed tax amount in terms
of the earlier order. [Para 10][622-A-E]
4. 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 aggrieved person could have availed
of an effective alternative remedy in the manner prescribed by
law. Although the power of the High Court under Article 226 of
the Constitution is very wide, the Court must exercise self-
imposed restraint and not entertain the writ petition, if an
alternative effective remedy is available to the aggrieved person.
[Para 11][623-H; 624-A-C]
Nivedita Sharma v. Cellular Operators Association of
India & Ors. (2011) 14 SCC 337 ; Thansingh Nathmal
& Ors. v. Superintendent of Taxes, Dhubri & Ors. AIR
1964 SC 1419 : [1964] 6 SCR 654 - followed.
Baburam Prakash Chandra Maheshwari v. Antarim Zila
Parishad now Zila Parishad, Muzaffarnagar AIR 1969
SC 556 : [1969] SCR 518 – relied on.
5. 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. [Para 11][625-E]
Titaghur Paper Mills Co. Ltd. & Anr. v. State of Orissa
& Ors. (1983) 2 SCC 433 : [1983] 2 SCR 743 – relied
on.
6. 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.
[Para 11][626-G]
Mafatlal Industries Ltd. & Ors. v. Union of India &
Ors. (1997) 5 SCC 536 : [1996] 10 Suppl. SCR 585 –
relied on.
7. Indubitably, the powers of the High Court under Article
226 of the Constitution are wide, but certainly not wider than the
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plenary powers bestowed on this Court under Article 142 of the
Constitution. Article 142 is a conglomeration and repository of
the entire judicial powers under the Constitution, to do complete
justice to the parties. Even while exercising that power, this Court
is required to bear in mind the legislative intent and not to render
the statutory provision otiose. 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 reference to Article
226 of the Constitution. [Paras 12 and 14][627-A-B; 632-E-F]
Oil and Natural Gas Corporation Limited v. Gujarat
Energy Transmission Corporation Limited & Ors. (2017)
5 SCC 42 : [2017] 2 SCR 922; Singh Enterprises v.
Commissioner of Central Excise, Jamshedpur & Ors.
(2008) 3 SCC 70 : [2007] 13 SCR 952 ; Commissioner
of Customs and Central Excise v. Hongo India Private
Limited & Anr. (2009) 5 SCC 791 ; Chhattisgarh State
Electricity Board v. Central Electricity Regulatory
Commission & Ors. (2010) 5 SCC 23 : [2010] 4 SCR
680 ; Suryachakra Power Corporation Limited v.
Electricity 
Department 
represented 
by 
its
Superintending Engineer, Port Blair & Ors. (2016) 16
SCC 152 : [2016] 8 SCR 108 ; State v. Mushtaq Ahmad
& Ors. (2016) 1 SCC 315 : [2015] 15 SCR 452
– relied on.
8. In a given case, the assessee may approach the High
Court before the statutory period of appeal expires to challenge
the
assessment order by way of writ petition on the ground that
the same is without jurisdiction or passed in excess of jurisdiction
- by overstepping or crossing the limits of jurisdiction including
in flagrant disregard of law and rules of procedure or in violation
of principles of natural justice, where no procedure is specified.
The High Court may accede to such a challenge and can also
non-suit the petitioner on the ground that alternative efficacious
remedy is available and that be invoked by the writ petitioner.
However, if the writ petitioner choses to approach the High Court
after expiry of the maximum limitation period of 60 days
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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. 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. [Para 15][633-B-E]
K.S. Rashid & Son v. the Income Tax Investigation
Commission AIR 1954 SC 207 : [1954] SCR 738; ITC
Ltd. & Anr. v. Union of India (1998) 8 SCC 610 –
distinguished.
Electronics Corporation of India Ltd. v. Union of India
& Ors. 2018 (361) ELT 22 (A.P.) ; Panoli Intermediate
(India) Pvt. Ltd. v. Union of India & Ors. AIR 2015
Guj 97 ; Phoenix Plasts Company v. Commissioner of
Central Excise (Appeal-I), Bangalore 2013 (298) ELT
481 (Kar.) — not approved.
9. 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. [Para 18][635-C-D]
10.1 In the present case, 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
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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. [Para 19][635-D-G]
10.2 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 the Site Director of the
respondent 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 in the month of July, 2018, which pre-supposes
that the respondent must have become aware about the
assessment order, at least in July, 2018. In the same affidavit, it
is asserted that the respondent company was not aware about
the assessment order, as it was not brought to its notice by the
employee concerned due to his negligence. The respondent in
the writ petition has averred that the appeal was rejected by the
appellate authority on the ground that it had no power to condone
the delay beyond 30 days, when in fact, the order examines the
cause set out by the respondent and concludes that the same
was unsubstantiated by the respondent.
That finding has not been
examined by the High Court in the impugned judgment and order
at all, but the High Court was more impressed by the fact that
the respondent was in a position to offer some explanation about
the discrepancies in respect of the volume of turnover and that
the respondent had already deposited 12.5% of the additional
amount in terms of the previous order passed by it. That reason
can have no bearing on the justification for non-filing of the appeal
within the statutory period. No affidavit of the erring employee
or at least the other employee 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 non-
compliance of statutory requirements in any manner. [Para
19][635-G-H; 636-A-E]
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11. 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. [Para 19][636-E-F]
12. It is not correct to say 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. Rejection of delay application by the
appellate forum does not entail in merger of the assessment order
with that order. [Para 20][636-G-H; 637-A]
13. 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. [Para 21][637-A-B]
Raja Mechanical Company Private Limited v.
Commissioner of Central Excise, Delhi-I (2012) 12 SCC
613 – relied on.
Case Law Reference
[1969] SCR 518
relied on
Para 11
(2011) 14 SCC 337
followed
Para 11
[1964] 6 SCR 654
followed
Para 11
[1983] 2 SCR 743
relied on
Para 11
[1996] 10 Suppl. SCR 585
relied on
Para 11
[2017] 2 SCR 922
relied on
Para 12
[2007] 13 SCR 952
relied on
Para 12
(2009) 5 SCC 791
relied on
Para 12
[2010] 4 SCR 680
relied on
Para 12
[2016] 8 SCR 108
relied on
Para 12
[2015] 15
SCR 452
relied on
Para 14
2018 (361) ELT 22(A.P.)
not approved
Para 15
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AIR 2015 Guj 97
not approved
Para 15
2013 (298) ELT 481 (Kar.)
not approved
Para 15
[1954] SCR 738
distinguished
Para 16
(1998) 8 SCC 610
distinguished
Para 17
(2012) 12 SCC 613
relied on
Para 20
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2413
of 2020.
From the Judgment and Order dated 19.11.2018 of the High Court
of Judicature at Hyderabad for the States of Telangana and Andhra
Pradesh in W.P. No. 39418 of 2018.
G. N. Reddy, Hemal Kirit Kumar Sheth, T. Vijaya Bhaskar Reddy,
V. Lakshmikumaran, Ms. Charanya Lakshmikumaran, Aaditya
Bhattacharya, Ms. Apeksha Mehta, Ms. Mounica Kasturi, and Ms. Ishita
Mathur, Advs. for the appearing parties.
The Judgment of the Court was delivered by
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 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
1 For short, “the High Court”
2 For short, “the Assistant Commissioner”
3 For short, “the 2005 Act”
4 For short, “the 1956 Act”
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Medicines etc. The Assistant Commissioner had called upon the
respondent to produce books of accounts for the assessment year
2013-14 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 inter-State 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
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
respondent-assessee was advised to file appeal before the Appellate
Deputy Commissioner on 24.9.2018 against the assessment order dated
21.6.2017. In the meantime, another assessment order came to be passed
on 31.3.2018 in relation to the Audit taken up for the tax period from
1.4.2013 to 31.3.2017. We are not concerned with the said order in the
present appeal.
4. Reverting to the appeal filed by the respondent against the
assessment order dated 21.6.2017, the same was dismissed on 25.10.2018
being barred by limitation and also because no sufficient cause was
made out. The respondent was then advised to file writ petition before
the High Court being Writ Petition No. 39418/2018, solely for quashing
5 For short, “the 2005 Rules”
6 For short, “the Appellate Deputy Commissioner“ or “the appellate authority”, as the
case may be“
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and setting aside of assessment order dated 21.6.2017 for tax period –
April, 2013 to March, 2014 (CST) being contrary to law, without
jurisdiction and in violation of principles of natural justice to the extent of
levy on the Branch Transfer turnovers and to direct the Assistant
Commissioner (CT) to re-do the assessment and reckon the correct
Branch Transfer 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, 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 ex-parte 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 paid Rs.9,59,190/- (Rupees nine lakhs fifty-nine
thousand one hundred ninety only) equivalent to the 12.5% of the taxes
in the year 2013-14 (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.
ASSTT. COMMR. (CT) LTU KAKINADA v. M/S. GLAXO SMITH
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6. The respondent, on the other hand, would urge that the High
Court has had ample power under Article 226 of the Constitution of
India to grant relief to the respondent considering the peculiar facts of
the present case being an exceptional situation which if not remedied,
would result in failure of justice.
7. We have heard Mr. G.N. Reddy, learned counsel for the
appellants and Mr. V. Lakshmikumaran, learned counsel for the
respondent.
8. From the indisputable facts, it is evident that the assessment
order dated 21.6.2017 was challenged by the respondent by way of
statutory appeal before the Appellate Deputy Commissioner only on
24.9.2018. Section 31 of the 2005 Act provides for the statutory remedy
against an assessment order. The same, as applicable at the relevant
time, reads thus: -
“31. (1) Any VAT dealer or TOT dealer or any other dealer
objecting to any order passed or proceeding recorded by any
authority under the provisions of the Act other than an order passed
or proceeding recorded by an Additional Commissioner or Joint
Commissioner or Deputy Commissioner, may within thirty days
from the date on which the order or proceeding 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.
(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
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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 sub-section (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.
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(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 sub-section (4) for the purpose of
passing appeal order under this section.
(5) Before passing orders under sub-section (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, 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 Order-in-Original 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.
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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.
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.”
ASSTT. COMMR. (CT) LTU KAKINADA v. M/S. GLAXO SMITH
KLINE CONSUMER HEALTH CARE LTD. [A. M. KHANWILKAR, J.]
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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 Manager-Finance, 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 2013-14 was completed
by the Assistant Commissioner (CT) LTU raising demand of
Rs.76,73,197/- vide assessment order dated 21.06.2017.
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 2013-2014 and therefore could not
respond or take any action in respect of this order/demand.
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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 respondent-
assessee cannot be condoned, the appellate authority observed thus: -
“However, to abide the principles of natural justice, the
appellant has been issued notices dated 03.10.2018 and 19.10.2018
to appear for admission hearings to be held on 10.10.2018 and
25.10.2018 respectively, in the office of Appellate Deputy
Commissioner (CT), Vijayawada for explaining reasons and his
contentions in support of the admission of appeal petition. The
A.R. appeared for the admission hearing on 25.10.2018 and
prayed for admission of appeal petition, but not submitted
any reliable grounds and substantial documentary evidence
in support of their submission that they were unaware of
the receipt of original assessment order.
It is further pertinent here to record that after receiving the
original assessment order, the appellant-dealer has filed a request
letter before the assessing authority for re-assessment under rule
60 of APVAT Rules, 2005. However, the AA has not considered
re-assessment
request, and issued an endorsement dt.11.05.2018,
rejecting the re-assessment 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 appellant-dealer was not aware of the service
of original assessment orders. Hence, it is to be affirmed that the
causes put-forth 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 prima-facie is not in tune with the provisions of the Act,
hence, liable to be rejected.
ASSTT. COMMR. (CT) LTU KAKINADA v. M/S. GLAXO SMITH
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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 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 ex-parte order on 8.11.2018,
which reads thus: -
“ORDER:
It is represented by Mr. S. Dwarakanath, learned counsel
for the petitioner that the petitioner has already paid 12.5% of the
disputed tax, for the purpose of filing an appeal. But, the employee,
who was incharge and who was subsequently, suspended in
contemplation of disciplinary proceedings, failed to file the appeal.
The contention of the learned counsel for the petitioner is that the
issue lies in a narrow campus.
Since the petitioner has already paid 12.5% of the disputed
tax, the request of the petitioner for granting one more opportunity
would be considered favourably, if the petitioner pays an additional
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amount equivalent to 12.5% of the disputed tax. The petitioner
shall make such payment within a period of one week.
Post on 19.11.2018 for orders.”
Be it noted that the respondent was advised to file writ petition
merely for setting aside of the assessment order dated 21.6.2017,
presumably, in light of the decision of Full bench of the same High Court
in Electronics Corporation of India Ltd. vs. Union 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 200-B. 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, 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
7 2018 (361) ELT 22(A.P.)
ASSTT. COMMR. (CT) LTU KAKINADA v. M/S. GLAXO SMITH
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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. P-3) and also suspending
him from official duties with immediate effect.
10. It is submitted that the Petitioner was not aware of the impugned
order since that fact was not brought to the notice by its own
employee, due to this negligence.
11. It appears, the said Mr. P. Sri Ram Murthy having realized his
negligence, made further mistake, by filing an application under
Rule 60 of the APVAT Rules read with Rule 14-A(10) of the
CST (AP) Rules on 9.5.2018 (Ex. P-4) contending, inter-alia, that
the revised value of stock transfer as per VAT 200-B should have
been considered instead of 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 200-
B at the end of the year. The ITC credit under VAT was also
allowed by the 1st Respondent, considering the stock transfer
turnover as 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. P-5) 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 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.
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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.
P-6). 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. P-7), 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, 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.”
ASSTT. COMMR. (CT) LTU KAKINADA v. M/S. GLAXO SMITH
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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 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
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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 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
2013-2014 (CST). The amount was paid on 13.11.2018.
Therefore, the writ petition is ordered, the impugned order
is set aside and the matter is remanded back to the 1st respondent.
The petitioner shall appear before the 1st respondent on 10.12.2018
and explain the discrepancies. After
such personal hearing, the
1st respondent may pass orders afresh.
As a sequel, pending miscellaneous petitions, if any, shall
stand closed. No costs.”
11. In the backdrop of these facts, the central question is: whether
the High Court ought to have entertained the writ petition filed by the
respondent?  As regards the power of the High Court to issue directions,
orders or writs in exercise of its jurisdiction under Article 226 of the
Constitution of India, the same is no more res integra.  Even though the
ASSTT. COMMR. (CT) LTU KAKINADA v. M/S. GLAXO SMITH
KLINE CONSUMER HEALTH CARE LTD. [A. M. KHANWILKAR, J.]
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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 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 self-imposed 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. 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 self-imposed 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
8 AIR 1969 SC 556
9 (2011) 14 SCC 337
10 AIR 1964 SC 1419
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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. 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 sub-section
(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 sub-section (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
11 (1983) 2 SCC 433
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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 Attorney-
General 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.”
(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 (1997) 5 SCC 536
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12. Indubitably, the powers of the High Court under Article 226 of
the Constitution are wide, but certainly not wider than the plenary powers
bestowed on this Court under Article 142 of the Constitution. Article 142
is a conglomeration and repository of the entire judicial powers under
the Constitution, to do complete justice to the parties. Even while
exercising that power, this Court is required to bear in mind the legislative
intent and not to render the statutory provision otiose.  In a recent decision
of a three-Judge 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 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
13 (2017) 5 SCC 42
14 (2008) 3 SCC 70
15 (2009) 5 SCC 791
16 (2010) 5 SCC 23
17 (2016) 16 SCC 152
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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 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. 1002-03, para 12 : SCR p. 899 of the Report,
Gajendragadkar, J., reiterated that the powers of this Court
are no doubt very wide and they are intended and “will always
be exercised in the interests of justice”. But that is not to say
that an order can be made by this Court which is inconsistent
with the fundamental rights guaranteed by Part III of the
Constitution. It was emphasised that an order which this Court
could make in order to do complete justice between the
parties, must not only be consistent with the fundamental
rights guaranteed by the Constitution, but it cannot even
be inconsistent with the substantive 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,
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wherein M. N. Venkatachaliah, J. (as his Lordship then was)
speaking for the majority, ruled that: (SCC pp. 634-35, 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 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
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scheme or pattern. It will again be wholly incorrect to say
that powers under Article 142 are subject to such express
statutory prohibitions. That would convey the idea that
statutory provisions override a constitutional provision.
Perhaps, the proper way of expressing the idea is that in
exercising powers under Article 142 and in assessing the
needs of “complete justice” of a cause or matter, the Apex
Court will take note of the express prohibitions in any
substantive statutory provision based on some fundamental
principles of public policy and regulate the exercise of its
power and discretion accordingly. The proposition does not
relate to the powers of the Court under Article 142, but only to
what is or is not “complete 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. 437-
38, 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 in another statute. This Court did not say so in Union
Carbide case [Union Carbide Corpn. v. Union of India,
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(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 uncondonable and it cannot be condoned
taking recourse to Article 142 of the Constitution.
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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 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 (Appeal-I),
Bangalore20.  The logic applied in these decisions proceeds on fallacious
18 (2016) 1 SCC 315
19 AIR 2015 Guj 97
20 2013 (298) ELT 481 (Kar.)
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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 on the ground that the same is without jurisdiction
or passed in excess of jurisdiction - by overstepping or crossing the
limits of jurisdiction including in flagrant disregard of law and rules of
procedure or in violation of principles of natural justice, where no
procedure is specified.  The High Court may accede to such a challenge
and can also non-suit the petitioner on the ground that alternative
efficacious remedy is available and that be invoked by the writ petitioner.
However, if the writ petitioner choses to approach the High Court after
expiry of the maximum limitation period of 60 days prescribed under
Section 31 of the 2005 Act, the High Court cannot disregard the statutory
period for redressal of the grievance and entertain the writ petition of
such a party as a matter of course.  Doing so would be in the teeth of the
principle underlying the dictum of a three-Judge 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.
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.
21 AIR 1954 SC 207
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17. Reliance was then placed on a three-Judge 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 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 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,
22 (1998) 8 SCC 610
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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.
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 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
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by its erring official (Mr. P. Sriram Murthy) in the month of July, 2018,
which pre-supposes that the respondent must have become aware about
the assessment order, at least in July, 2018. In the same affidavit, it is
asserted that the respondent company was not aware about the
assessment order, as it was not brought to its notice by the employee
concerned due to his negligence. The respondent in the writ petition has
averred that the appeal was rejected by the appellate authority on the
ground that it had no power to condone the delay beyond 30 days, when
in fact, the order examines the cause set out by the respondent and
concludes that the same was unsubstantiated by the respondent. That
finding has not been examined by the High Court in the impugned
judgment and order at all, but the High Court was more impressed by
the fact that the respondent was in a position to offer some explanation
about the discrepancies in respect of the volume of turnover and that the
respondent had already deposited 12.5% of the additional amount in
terms of the previous order passed by it. That reason can have no bearing
on the justification for non-filing of the appeal within the statutory period.
Notably, the respondent had relied on the affidavit of the Site Director
and no affidavit of the concerned employee (P. Sriram Murthy, Deputy
Manager-Finance) 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 non-compliance 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 Limited vs. Commissioner of Central
Excise, Delhi-I23. It is well settled that rejection of delay application by
23 (2012) 12 SCC 613
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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.
Kalpana K. Tripathy
Appeal allowed.
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