Dismissed

M/s. Ajay Infra Projects (P) Ltd, v. The Commercial Tax Officer

Telangana HC25 Aug 2014WP/5250/2014

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging the Appellate Deputy Commissioner's order withdrawing the admission of a tax appeal filed beyond the statutory limitation period. The Court held that quashing the order would revive an earlier illegal admission and concluded no substantial injustice warranted interfering.

What did the court decide?

Granting the relief sought to quash the order withdrawing the appeal admission and directing a hearing on merits was declined.

M/s. Ajay Infra Projects (P) Ltd, Vs The Commercial… — Service and Employment | Telangana HC (2014)

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HON’BLE SRI JUSTICE RAMESH RANGANATHAN

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AND

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HON’BLE SRI JUSTICE M. SATYANARAYANA MURTHY

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WRIT PETITION No.5250 OF 2014

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ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan)

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The relief sought for in this Writ Petition is to declare the proceedings of the 2^nd respondent - Appellate Deputy Commissioner (CT) Punjagutta Division, Hyderabad dated 29.01.2014, as arbitrary and illegal, and to direct the 2^nd respondent to hear the Appeal and pass orders on merits; to direct the 1^st respondent not to initiate coercive steps till disposal of the Appeal; or, in the alternative to declare the levy of higher rate of tax on additional income under Section 4(7)(a) of Andhra Pradesh Value Added Tax Act, 2005 (for short, ‘the VAT Act’) by the Commercial Tax Officer, in his assessment order dated 10.04.2013, as illegal; and to declare Section 4(7)(e) of the A.P. VAT Act as unconstitutional.

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Facts, in brief, are that the petitioner, a works contractor engaged in the construction of apartments, is a registered dealer under the A.P. VAT Act, and an assessee on the rolls of Commercial Tax Officer, Vengalrao Nagar Circle, Hyderabad. They were assessed to tax, for the assessment years 2009-10 to 2011-12, by the assessing authority by his order dated 10.04.2013. On receipt of a copy of the assessment order on 12.04.2003, the petitioner invoked the jurisdiction of this Court and filed W.P. No.12359 of 2013. A Division Bench of this Court, by order in W.P. No.12359 of 2013 dated 11.06.2013, rejected the contention that the impugned assessment order was in violation of principles of natural justice and, thereafter, observed:

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“……………..Hence, if aggrieved, the petitioner has to pursue the statutory remedy of appeal, but it cannot straightaway invoke the extraordinary jurisdiction of this Court

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under Article 226 of the Constitution of India.

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Accordingly, granting leave and liberty to the petitioner to pursue the remedy of statutory appeal or to institute any other appropriate proceedings for redressal of his grievance, the Writ Petition is dismissed. No costs.”

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The petitioner then invoked the jurisdiction of the 2^nd respondent and preferred an Appeal on 01.07.2013. The said Appeal was admitted and thereafter the 2^nd respondent, by his order dated 29.01.2014, held that, since the Appeal was filed beyond the period of 60 days as prescribed under the provisions of A.P. VAT Act, admission of the Appeal was withdrawn and cancelled. The 2^nd respondent relied on two Division Bench judgments of this Court in M/s. Agarwal Industries Private Limited and another v. Appellate Deputy commissioner (CT), Hyderabad Rural Division, Hyderabad^[1] and M/s. Joy Alukkas Traders (India) Private Limited v. Commercial Tax Officer, Hyderabad and two others^[2] to hold that the mere fact that the Writ Petition was pending before the High Court did not confer any right on the appellant to claim exclusion of the period, during which the Writ Petition was pending before the High Court, in computing the period of limitation for preferring an appeal under the A.P. VAT Act.

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Sri M.V.J.K Kumar, learned counsel for the petitioner, would submit that the 2^nd respondent, having admitted the Appeal on 28.08.2013, lacks jurisdiction either to review his earlier order or to withdraw the earlier admission of the Appeal; the power conferred under Rule 60 of A.P. VAT Rules, 2005 is only to correct arithmetical or clerical errors, and not to review the earlier order of admission dated 28.08.2013; as the 2^nd respondent lacks jurisdiction to do so, the impugned order is liable to be set-aside; the 2^nd respondent must be directed to hear the Appeal on merits; while the order of the 2^nd

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respondent, admitting the Appeal, can be revised under Section 32 of the A.P. VAT Act, the appellate authority lacks jurisdiction to withdraw his earlier order, admitting the Appeal, in the exercise of his jurisdiction under Rule 60 of the A.P. VAT Rules; and even otherwise as the Division Bench of this Court had, in its order in W.P. No.12359 of 2013 dated 11.06.2013, granted liberty to the petitioner to institute any other appropriate proceedings for redressal of their grievance, the petitioner is entitled to invoke the jurisdiction of this Court under Article 226 of the Constitution of India questioning the validity of the assessment order dated 10.04.2013, even if it was under challenge in the earlier Writ Petition. Learned counsel would rely on Arora Enterprises, Hyderabad v. The Deputy Commissioner of Commercial Taxes,

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Abids Division, Hyderabad and anothe r^[3] a n d Commissioner, Sales Tax, U.P. v. Bharat Bone Mil l^[4] .

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Section 31 of the A.P. VAT Act relates to Appeals and, under Sub-section (1) thereof, any VAT dealer, objecting to any order passed or proceeding recorded by any authority under the provisions of the Act may, within 30 days from the date on which the order or proceeding is served on him, appeal to such authority as may be prescribed. Under the proviso thereto, the Appellate Authority may, within a further period of 30 days, admit the Appeal preferred after a period of 30 days, if he is satisfied that the VAT dealer had sufficient cause for not preferring the Appeal within that period.

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It is not in dispute that the assessment order dated 10.04.2013 was received by the petitioner on 12.04.2013. While the initial 30 day period for preferring an Appeal, under Section 31(1) of the A.P. VAT Act, expired by 12.05.2013, the extended period of 30 days, as stipulated in the 1^st proviso to Section 31, expired by 12.06.2013. The petitioner preferred an Appeal to the 2^nd respondent only, thereafter, on 01.07.2013. It is also not in dispute, more so in the light of the

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judgments of this Court in M/s. Agarwal Industries Private Limited¹ and M/s. Joy Alukkas Traders (India) Private Limited² , that the 2^nd respondent lacks jurisdiction to admit an Appeal beyond the period of 60 days. The 60 days period, as noted hereinabove, expired by 12.06.2013 and the Appeal was, admittedly, preferred thereafter on 01.07.2013.

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The question which necessitates examination is whether the 2^nd respondent having admitted the Appeal, by his order dated 28.08.2013, lacks jurisdiction to withdraw the order of admission on the ground that the Appeal was filed beyond the period of 60 days prescribed under Section 31 of the A.P. VAT Act. Rule 60 of the A.P. VAT Rules relates to correction of errors and, thereunder, any authority prescribed or the appellate or revising authority may, at any time within 4 years from the date of any order passed by him, rectify any clerical or arithmetical mistake apparent from the record. The only limitation, placed by Rule 60, is that no such rectification, which has the effect of enhancing the tax liability or penalty, shall be made unless a notice is given to the person concerned and he is provided a reasonable opportunity of being heard.

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The submission of Sri M.V.J.K. Kumar, learned counsel for the petitioner, is that the order dated 28.08.2013, admitting the Appeal, is neither a clerical nor an arithmetical error apparent from the record; and the 2^nd respondent lacks jurisdiction to withdraw the order of admission.

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In the order, under challenge in this Writ Petition, the Appellate Authority holds that he lacks power to admit any Appeal if filed after 60 days; the Appellate Authority, being a creature of the Act, cannot deviate from the prescribed statutory requirement; while granting leave to the petitioner to pursue the remedy of appeal, the High Court had not condoned the delay or excluded the period during which the Writ

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Petition was pending admission before it; as such the period, during which the Writ Petition was pending before the High Court, could not be excluded for the purpose of computation of the period of limitation; and as the Writ Petition filed earlier merely granted leave and liberty to the petitioner to pursue the remedy of a statutory appeal or to institute any other appropriate proceedings for redressal of his grievance, he could not have entertained the Appeal beyond the period of 60 days as prescribed under Section 31 of the A.P. VAT Act.

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It is not in dispute that Section 31 of the A.P. VAT Act, and the 1^st proviso thereto, disable the Appellate Authority from admitting an Appeal filed beyond 60 days from the date on which the order of the original authority was received by the dealer. It is also not in dispute that the Appeal was filed after the period of limitation of 60 days had expired. While the submission of Sri M.V.J.K. Kumar that the power conferred under Rule 60 of A.P. VAT Rules to correct clerical or arithmetical errors, does not enable the Appellate Authority to review his own orders cannot be said to be without merit in view of the law declared by the Supreme Court in Bharat Bone Mill⁴ a n d Arora Enterprises³ , it must be borne in mind that the jurisdiction, under Article 226 of the Constitution of India, is discretionary and this Court would not exercise its discretion, save larger public interest. A writ of mandamus and a writ of certiorari are discretionary unlike a writ of habeas corpus which can be sought as a matter of right. One of the principles inherent is that the exercise of discretionary power should be for the sake of justice and, if quashing the order results in greater harm to the society, then the Court may refrain from exercising the power. (State of Maharashtra v. Prabhu^[5] ) . The power under Article 226 of the Constitution of India need not be exercised in every case where there is an error of law. In the name of correcting errors of law, Courts ought not to bring forth a situation which would result in injustice and, if justice became the by-product of an erroneous view of

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the law, Courts are not expected to erase it in the name of correcting errors of law. (Roshan Deen v. Preetila l^[6] ) . One of the limitations imposed by this Court, on itself, is that it would not exercise jurisdiction unless substantial injustice has ensued or is likely to ensue. It would not allow itself to be turned into a Court of appeal to set right mere errors of law which do not occasion injustice. (Sangram Singh v.

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Election Tribunal, Kotah^[7] ) . Even if a legal flaw might be electronically detected, this Court would not interfere save manifest injustice or a substantial question of public importance is involved. (Rashpal Malhotra v. Mrs. Satya Rajpu t^[8] ; Council of Scientific and Industrial Research v. K.G.S. Bhat t^[9] ; M. Govinda Rao v. A.P. State Wakf Board, Rep., by its Principal Secretary, Hyderabad^[10] ) .

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Accepting the submission of Sri M.V.J.K. Kumar, Learned counsel for the petitioner, that the 2^nd respondent lacks jurisdiction to withdraw admission of the Appeal on 28.08.2013, would only result in revival of the order of admission of the Appeal dated 28.08.2013 which is, admittedly, illegal and without jurisdiction as Section 31(1) prohibits the Appellate Authority from entertaining an Appeal beyond the period of limitation of 60 days. This Court would not exercise its jurisdiction under Article 226 of the Constitution of India to set-aside an illegal order, if it would result in reviving an earlier illegal order. If the quashing of an order is likely to result in revival of another order, which is itself illegal, interference under Article 226 is unnecessary. (Gadde Venkateswara Rao v. Government of A.P^[11] ; Aligarh Muslim University v. Mansoor All Khan^[12] ; M. Govinda Rao v. A.P. State Wakf Board, Rep., by its Principal Secretary, Hyderabad^[13] ) . We see no reason, therefore, to exercise discretion, under Article 226 of the Constitution of India, to interfere.

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The other contention urged by Sri M.V.J.K. Kumar, Learned counsel for the petitioner, is that in view of the liberty granted by the Division Bench in its order in W.P. No.12359 of 2013 dated 11.06.2013, permitting the petitioner to institute any other appropriate proceedings for redressal of their grievance, they are entitled to file a Writ Petition afresh questioning the earlier assessment order. As noted herein above, W.P. No.12359 of 2013 was filed questioning the very same assessment order of the 1^st respondent dated 10.04.2013. The Division Bench dismissed the Writ Petition on the ground that the petitioner had the alternative statutory remedy of an Appeal and could not, straightaway, invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. Having so observed, the Division Bench granted leave and liberty to the petitioner to institute any other appropriate proceedings for redressal of their grievance. The words “any other appropriate proceedings”, in the order in W.P. No.12359 of 2013, cannot be understood to mean a Writ Petition as the Division Bench would not have, in such a case, dismissed the Writ Petition on the ground that the petitioner had the statutory remedy of Appeal. As held by the Supreme Court in Sarguja Transport Service

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v. State Transport Appellate Tribunal, M.P., Gwalior and Others^[14] and Ratnagiri Gas and Power Private Limited v. RDS Projects Limited and others^[15] , the petitioner cannot invoke the jurisdiction of this Court to file a Writ Petition questioning the very same assessment order dated 10.04.2013, as they were not granted liberty to file a Writ Petition afresh questioning the said assessment order.

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The Writ Petition fails and is, accordingly, dismissed. In consequence, miscellaneous petitions, if any, pending in this Writ Petition shall stand dismissed. There shall be no order as to costs.

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_____________________________ RAMESH RANGANATHAN, J

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_____________________________ M. SATYANARAYANA MURTHY, J Date: 25-08-2014. Dsh

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HON’BLE SRI JUSTICE RAMESH RANGANATHAN

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AND

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HON’BLE SRI JUSTICE M. SATYANARAYANA MURTHY

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