Allowed

M/S Himalaya Drug Company v. Commissioner of Central Tax (Appeals-Ii)

Karnataka HC8 Sept 2022WP/10142/2021

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a writ petition to condone delay in preferring an appeal against a tax order. Finding sufficient cause for the delay due to internal procedural lapses and business travel, the court quashed the dismissal order and remitted the matter to the Appellate Authority for reconsideration on merits.

What did the court decide?

Quashment of impugned order; condonation of delay; remittal of appeal to Appellate Authority for fresh consideration on merits.

M/S Himalaya Drug Company Vs Commissioner of Central… — GST and Indirect Tax | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 8^TH DAY OF SEPTEMBER 2022

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BEFORE

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THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR

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WRIT PETITION No.10142 OF 2021 (T-TAR)

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BETWEEN:

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M/S. HIMALAYA DRUG COMPANY, MAKALI, BANGALORE-562 162. (REPRESENTED BY K S RAJITHA), D/O, K.K. SREEDHARAN, AGED ABOUT 52 YEARS, SR. MANAGER TAXATION OF M/S THE HIMALAYA DRUG COMPANY.)

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…PETITIONER

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(BY SRI. RAGHURAM V., SENIOR COUNSEL FOR SRI. C.R. RAGHAVENDRA, ADVOCATE)

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AND:

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COMMISSIONER OF CENTRAL TAX (APPEALS-II), 4^TH FLOOR, ABOVE BMTC BUS STAND, DOMLUR, OLD AIRPORT ROAD, BANGALORE-560 071.

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ADDITIONAL COMMISSIONER OF CENTRAL TAX, CENTRAL EXCISE AND SERVICE TAX, GST COMMISSIONERATE, BANGALORE NORTH-WEST, 2^ND FLOOR, BMTC BUS STAND COMPLEX, SHIVAJI NAGAR, BENGALURU-560 051.

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…RESPONDENTS

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(BY SRI. AMIT ANAND DESHPANDE, CGC)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER-IN-APPEAL NO.174/2020-21 CT DATED 02.03.2021 PASSED BY THE R1 ENCLOSED AS ANNEXURE-A, AS BEING VIOLATIVE OF ARTICLES 14 AND 19 BEING UNREASONABLE, ARBITRARY, OPPRESSIVE, EXCESSIVE, AND WITHOUT THE AUTHORITY OF LAW AND ETC.,

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THIS W.P. COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-

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ORDER

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In this petition, the petitioner seeks quashing of the impugned order in appeal of Annexure-A dated 02.03.2021 passed by respondent No.1-Appellate Authority, whereby the impugned order at Annexure-B dated 28.02.2019 passed by respondent No.2 was confirmed by respondent No.1-Appellate Authority.

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Heard learned counsel for the petitioner, learned CGC for the respondents and perused the material on record.

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The material on record discloses that the proceedings initiated against the petitioner was contested and the same culminated in the impugned order in original dated 28.02.2019 passed by respondent No.2, which was received by the petitioner on 13.03.2019. Aggrieved by the same, petitioner preferred an appeal on 14.11.2019 before respondent No.1-Appellate Authority along with an application for condonation of delay in preferring the appeal. By the impugned order dated 02.03.2021,

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respondent No.1-Appellate Authority declined to condone the delay in preferring the appeal and accordingly, dismissed the appeal as barred by limitation. Aggrieved by the impugned orders, petitioner is before this Court by way of the present petition.

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It is contended that the inability and omission on the part of the petitioner to prefer the appeal before the Appellate Authority within the prescribed period was due to bonafide reasons, unavoidable circumstances and sufficient cause as detailed in the application for condonation of delay as well as in the present petition. It is contended that though the Appellate Authority does not have power to condone the delay in preferring the appeal, it is always open for this Court to exercise its extra ordinary jurisdiction under Article 226 of the Constitution of India and this Court is empowered to condone the delay in order to do complete and substantial justice, particularly when the petitioner has good case to urge on merits and is ready to abide by the terms and conditions to be imposed by this Court. In support of its contentions, reliance is placed upon the judgment of the Hon’ble Division Bench in

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⁴

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W.A.No.942/2021 [SIMPLEX INFRASTRUCTURES LTD., AND ANOTHER V/S. THE JOINT COMMISSIONER OF

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CENTRAL TAX AND OTHERS, D.D. ON 03.12.2021] .

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Per contra, it is the contention of the

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respondents that there is lack of due diligence and negligence on the part of the petitioner in preferring the appeal within the prescribed period and no indulgence can be shown in favour of the petitioner, who has slept over his rights for more than six months and as such, the petition is liable to be dismissed. Reliance is placed on the judgment of the Division Bench of this Court in the case of M/S. LAXMI ELECTRONIC MOULDS & PRECISION ENGINGEERING PRIVATE LTD., V/S. UNION OF INDIA AND OTHERS [W.P.No.53511/2018, D.D., ON 23.09.2021] .

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A perusal of the material on record, in particular, the application for condonation of delay filed by the petitioner before the respondent No.1-Appellate Authority as well as the grounds urged in the Memorandum of Appeal as well as in the present petition will indicate that

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it is the specific contention of the petitioner that the impugned order in original dated 28.02.2019 passed by respondent No.2 was received by the petitioner only on 13.03.2019 when it was delivered to the inward Section of the petitioner and was not forwarded or handed over to the Senior Manager (Taxation), who was in charge of the case as well as indirect taxes of the petitioner-Company and hence, petitioner was not aware of the said order. It is contended that the GST regime having commenced on 01.07.2017, the extended last date to take input tax credit was 31.03.2019 and accordingly, the petitioner and its aforesaid officer were over burdened with compliances during March-2019 to October-2019, since they had GST registration in 24 states and she was traveling to many states to complete the GST audit. It is further contended that on account of the absence of the aforesaid officer of the petitioner-Company due to her travel, the impugned order in original was received by the inward Section and not forwarded/delivered to her and the GST audit being a very cumbersome process, it took substantial time and the said Officer was not served with the copy of the order so as

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to enable her to prefer the appeal within the stipulated period. It is also contended that the petitioner and the aforesaid officer came to know about order in original only during October-November, 2019 when the respondentsRevenue sought a clarification from the petitioner about the status of the order. Immediately thereafter, petitioner took necessary steps to prefer the appeal before respondent No.1-Appellate Authority along with an application seeking condonation of delay.

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The aforesaid facts and circumstances clearly establish that the petitioner had made out valid and sufficient ground/cause to condone the delay in preferring the appeal before the appellate Authority. It is also clear that the inability and omission on the part of the petitioner to prefer the appeal within the prescribed period was due to bonafide reasons, unavoidable circumstances and sufficient cause. Though it is well settled that Respondent No.1-Appellate Authority does not have power to condone the delay beyond the extended/condonable period of 30 days after expiry of the initial period of 60 days, by adopting

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justice oriented approach and in order to do complete and substantial justice, in the peculiar/special facts and circumstances obtaining in the instant case and in the light of the material on record which clearly establishes that the delay in preferring the appeal was wholly unintentional and due to valid and sufficient grounds referred to supra coupled with the fact that the petitioner has a good case to urge on merits and the balance of convenience in its favour and in view of the judgment of the Division Bench in Simplex Infrastructure’s case supra, I deem it just and appropriate to exercise my powers under Article 226 of the Constitution of India and condone the delay in preferring the appeal by the petitioner by setting aside the impugned order at Annexure-A and remit the matter back to respondent No.1 for reconsideration of the appeal afresh on merits in accordance with law.

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In so far as the contention of the respondents that the delay ought not to be condoned in view of the judgment of the Division Bench in Lakshmi Electronics case supra is concerned, a perusal of the said judgment will indicate that this Court has declined to exercise its

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discretion to condone the delay in the facts and circumstances of the said judgment, which are clearly distinguishable from the facts of the instant case and consequently, no reliance can be placed upon the said judgment by the respondent since the same is inapplicable to the case on hand and the said contention cannot be accepted.

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9. In the result, the following:

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ORDER

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i) Writ petition is allowed subject to the petitioner depositing a sum of Rs.10,000/(Rupees Ten Thousand only) to the Advocates Welfare Fund, Bengaluru, within a period of eight weeks from today.

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ii) The impugned order at Annexure-A dated 02.03.2021 passed by the respondent No.1 is hereby quashed and the application for condonation of delay in preferring the appeal by the petitioner before respondent No.1 is hereby allowed and the delay in preferring the appeal stands condoned.

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iii) The matter is remitted back to respondent No.1 for re-consideration afresh in accordance with law, without reference to the issue/question regarding condonation of delay and/or limitation in preferring the appeal which stands concluded in favour of the petitioner by virtue of this order.

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iv) The respondent No.1 is directed to consider the appeal preferred by the petitionerappellant without reference to the issue/question of limitation and dispose of the appeal on merits in accordance with law.

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v) It is made clear that this order is passed in the peculiar/special facts and circumstances obtaining in the instant case and shall not be treated as a precedent or having any precedential value for any purpose, whatsoever.

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Sd/JUDGE

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Nc/Bmc

M/S Himalaya Drug Company v. Commissioner of Central Tax (Appeals-Ii)

Case brief

What is this about?

What did the court decide?

M/S Himalaya Drug Company v. Commissioner of Central Tax (Appeals-Ii)

Case brief

What is this about?

What did the court decide?

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