M/S. Sarojini Engineering Works ... vs Commercial Tax Officer
2022 Latest Caselaw 7471 AP

     IN THE HIGH COURT OF ANDHRA PRADESH:
                  AT AMARAVATI
                       ***

Writ Petition Nos.3905 and 3795 of 2021 Between:

M/s.Sarojini Engineering Works Private Limited, rep. by its Managing Director, Mr.P. Rajan Babu, Flat No.302, Chillapalli Complex, Dwarakanagar, Visakhapatnam - 530 016.

.... Petitioner And

1) Commercial Tax Officer, Dwarakanagar Circle, Visakhapatnam & Two others.

....Respondents.

Date of Common Order pronounced on : 29.09.2022

THE HON'BLE SRI JUSTICE C. PRAVEEN KUMAR

AND

THE HON'BLE SRI JUSTICE A.V. RAVINDRA BABU

1. Whether Reporters of Local newspapers : Yes/No may be allowed to see the judgments?

2.Whether the copies of judgment may be marked: Yes/No to Law Reporters/Journals:

3.Whether the Lordship wishes to see the fair copy : Yes/No of the Judgment?

________________________________ JUSTICE C. PRAVEEN KUMAR

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

* THE HON'BLE SRI JUSTICE C. PRAVEEN KUMAR

AND

THE HON'BLE SRI JUSTICE A.V. RAVINDRA BABU

+ Writ Petition Nos.3905 and 3795 of 2021

% 29.09.2022

# M/s.Sarojini Engineering Works Private Limited, rep. by its Managing Director, Mr.P. Rajan Babu, Flat No.302, Chillapalli Complex, Dwarakanagar, Visakhapatnam -

530 016.

.... Petitioner And

$1) Commercial Tax Officer, Dwarakanagar Circle, Visakhapatnam & Two others.

....Respondents.

! Counsel for the Petitioner: 1) Sri S. Dwarakanath, Senior Counsel.

2) Sri K.V.J.L.N. Sastry.

Counsel for the Respondents: Learned Government Pleader for Commercial Tax.

<Gist :

>Head Note:

? Cases referred:

1) (2015) 80 VST 492

2) 2018 (3) ALD 321

3) 2020 SCC Online SC 440

4) (2012) 12 SCC 613

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

THE HON'BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

THE HON'BLE SRI JUSTICE A.V. RAVINDRA BABU

Writ Petition Nos.3905 AND 3795 of 2021

COMMON ORDER:- (per the Hon'ble Sri Justice C. Praveen Kumar)

As both the writ petitions are interconnected, the

same are disposed of by this common order.

2. Assailing the Assessment Order No.63500, dated

31.03.2017, for the year 2012-13 under the CST Act,

passed by the first respondent, as barred by limitation and

the same came to be passed without giving any opportunity

to the petitioner, W.P.No.3905 of 2021 came to be filed.

3. While W.P.No.3795 of 2021 came to be filed, seeking

issuance of Writ of Mandamus to set aside the impugned

Assessment Order No.116695, dated 15.03.2018 for the

year 2013-14 under the CST Act, passed by the first

respondent, as barred by limitation and without giving any

opportunity to the petitioner.

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

4. Since the facts in both the cases are similar in

nature, it would be appropriate to refer to the facts in

W.P.No.3905 of 2021 by taking it as a lead petition, which

are as under:-

(a) The petitioner herein is an assessee on the rolls of

the first respondent, doing business in Manganese Ore.

The petitioner, is a registered dealer under Andhra Pradesh

Value Added Tax Act, 2005 [for short, "APVAT Act"] and

Central Sales Tax Act, 1956 [for short "CST Act"]. It is

stated that the international exports are exempt under

Section 5(1) of CST Act, subject to production of

documentary evidence namely Purchase Order of the

Foreign Buyer, Proof of export and receipt of consideration

in foreign exchange. In respect of inter-state sales against

'C' forms, the turnover is liable to be taxed @ 2%, provided

the entire declarations are filed, covering the turnover. In

respect of transit sales, they are exempt under Section 6(2)

read with Section 3(b) of the CST Act, provided 'E1' forms

from the first Inter-State sales and 'C' forms from the

buyers are filed.

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(b) While things stood thus, first respondent passed

an adverse order for the year 2012-13 levying tax

@ 14.5% on the entire turnover, on the ground that the

petitioner has failed to produce the documentary evidence

in support of his claim for exemption towards exports and

transit sales and 'C' forms for concessional rate of tax. The

said order which was passed on 31.03.2017 was served on

to the petitioner on 05.05.2017. Because of ill-health and

hospitalization, the petitioner could not take any steps to

challenge the same within the time prescribed under

Section 31 of the APVAT Act. However, on 04.12.2018, the

petitioner preferred an appeal before the second

respondent, wherein, he claimed that the exports turnover

do not relate to the sales of the foreign country but sales to

SEZ Units within India, which are also not liable to tax,

provided Form-I declarations are given by SEZ Units, for

the transit sales as well. The said appeal was filed with a

delay of 540 days. Though, reasons given for filing the

appeal with a delay, were accepted, the Appellate Authority

rejected the appeal on the ground that he has no authority

or jurisdiction to condone the delay. Challenging the same,

the petitioner filed an appeal before the APVAT Appellate

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Tribunal at Visakhapatnam vide T.A.No.207 of 2019

questioning the rejection of the appeal by the second

respondent. The said appeal was also dismissed on the

ground that though delay in filing is explained and is

acceptable but the same cannot be condoned beyond a

period of thirty [30] days, when the provisions of the

Limitation Act, are not applicable, in view of the judgment

of the Hon'ble Supreme Court in M.P. Steel Corporation

vs. Commissioner of Central Excise1. Now, the present

writ petition is filed challenging the original Order of

Assessment itself, as barred by limitation and that the

order came to be passed, without giving an opportunity of

hearing before confirming the liability.

5. Sri S. Dwarakanath, learned Senior Counsel for the

petitioner, mainly submits that though the petitioner has

filed an appeal before the second respondent and thereafter

approached APVAT Appellate Tribunal, seeking to condone

the delay, there is no bar to challenge the order passed by

the Assessing Authority on 31.03.2017. He relied upon a

Full Bench Judgment of the Combined High Court in

Electronics Corporation of India Limited vs. Union of

1 (2015) 80 VST 492

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India and others2 in support of his plea. He further

submits that the order passed by the primary authority on

merits does not get merged with the order passed by the

Appellate Authority since the appeal came to be rejected on

the ground of delay itself. He further submits that the

order passed by the primary authority is also violative of

principles of natural justice as the same came to be passed

without giving an opportunity of hearing the petitioner.

6. No counter is filed by the respondents in spite of

granting time. In fact, learned Government Pleader for

Commercial Tax, appearing for the respondents would

contend that since the issue involves legal aspects, the

same can be decided without a counter as well. Learned

Government Pleader would contend that since the orders of

the Appellate Authority as well as the APVAT Appellate

Tribunal have become final, the question of challenging the

order passed by the Assessing Authority, nearly four years

after passing of the order, cannot be entertained.

According to him, if applications of this nature are

entertained, there will not be any end to the litigation. He

further submits that in the grounds of appeal filed before

2 2018 (3) ALD 321 = MANU/AP/0150/2018

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the second respondent, the issues relating to limitation

was also raised, but, having regard to the order passed by

the Appellate Authority, rejecting the appeal itself, though

not on merits, but on the ground of delay, the findings of

the assessing authority get merged with the order of the

Appellate Authority which was confirmed by the Tribunal.

7. Insofar as the violation of principles of natural justice

is concerned, learned Government Pleader would contend

that a perusal of the Assessment Order, would show that

though the petitioner has received a show cause notice, he

did not file any objections and did not contest the matter

and hence he cannot now turn around and say that no

opportunity of personal hearing was given before passing

the Assessment Order.

8. Before proceeding further, it is to be noticed that the

second respondent as well as the APVAT Appellate Tribunal

while rejecting the appeal, filed by the petitioner, on the

ground of delay categorically held that though the

appellant/writ petitioner has got genuine reasons in filing

the appeal beyond the condonable period, but, the Act does

not permit admission of the appeal filed beyond the period.

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It would be appropriate to extract the relevant portion of

the order passed by the APVAT Appellate Tribunal, which

is as under:-

"(c) As seen from the delay condonation petition the appellant has furnished the proof that appellant has got paralysed from 2016 and hence he was unable to look after the business. Though the appellant has got genuine reasons in filing the appeal beyond the condonable period, but whatsoever grounds may be the Act does not permit to admit the appeal if filed beyond the condonable period. The action of the ADC is restricted by the provisions stated supra and here the Limitation Act of 1963 is also not applicable to the present case as held by the Hon'ble Apex Court in case of M.P. Steel Corporation vs. Commissioner of Central Excise reported in [2015] 80 VST 492 that "the Limitation Act, 1963 applies only to courts and not to quasi- judicial Tribunals. It is only when a suit, appeal or application of the description in the schedule is to be filed in a Court under a special or local law that the provision gets attracted. The 1963 Act including section 14 would not apply to appeals filed before a quasi-judicial Tribunal such as the Collector (Appeals) mentioned in Section 128 of the Customs Act, 1962".

9. Even, the Appellate Deputy Commissioner in his

order categorically states that the appellant was not able to

file appeal due to medical reasons, which are mentioned

therein, but as the authority has no power to condone the

delay, the appeal was rejected. From the two orders

referred to above, it is very much clear that the reasons

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given by the petitioner for not filing the appeal due to

medical reasons were accepted but since they are

powerless to condone the delay beyond a particular period,

appeals came to be rejected.

10. Keeping this factual aspect in the background, we

shall now proceed to deal with the issue as to whether a

writ petition would lie?

11. It is no doubt true that the Assessment Order, which

was passed on 31.03.2017, came to be challenged in the

appeal before the second respondent with a delay and

before the APVAT Appellate Tribunal. The second

respondent as well as the Tribunal rejected the appeals on

the ground of delay as stated supra. Thereafter, the

present writ petition came to be filed questioning the order

passed by the authority, raising grounds which go to the

root of the matter.

12. A Full Bench of the Composite High Court for the

State of Telangana and the State of Andhra Pradesh in

ECIL, after referring to the judgments of (i) The Kerala

Education Bill, 1957 reported in AIR 1958 SC 956; (ii)

Minerva Mills vs. Union of India reported in AIR 1980 SC

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1789; and (iii) L. Chandra Kumar vs. Union of India

reported in (1997) 3 SCC 261, held that writ jurisdiction

conferred upon the High Court under Article 226 of the

Constitution of India is part of the inviolable basic

structure of the Constitution and any law which seeks to

take away or restrict the jurisdiction of the High Court

under Article 226 of the Constitution of India must be held

to be void.

13. In ECIL vs. Union of India [cited 2 supra], the Full

Bench dealt with a similar situation, where the Orders-in-

Original dated 21.10.2014 which was appealable under

Section 35 of the Act of 1944, had to be filed within sixty

days ordinarily and the Appellate Authority was

empowered to condone delay only for thirty days thereafter,

provided sufficient cause was shown. In the said case, the

petitioner company filed appeals impugning the Order-in-

Original dated 21.10.2014, long after the prescribed period

i.e. on 02.02.2016 along with an application to condone the

delay. Vide order dated 31.05.2016, the Commissioner of

Appeals dismissed the appeals on the ground that the

delay cannot be condoned beyond the period of limitation.

Thereupon, the petitioner company preferred an appeal

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

before the jurisdictional Customs, Excise & Service Tax

Appellate Tribunal. Vide order dated 03.01.2017, the

Tribunal confirmed the order of the Commissioner of

Appeals. Left with no other option, the petitioner therein

filed writ petition before the High Court assailing the

Order-in-Original dated 21.10.2014. Similar objection, as

raised in the present case came to be advanced before the

Full Bench of the High Court. Dealing with the same, the

Full Bench of Combined High Court, held as under:-

"10. At this stage we may note, with due respect, that absence of challenge to the orders of the appellate authority and the Tribunal in the circumstances obtaining cannot be a factor for non-suiting the petitioner company. It must be kept in mind that dismissal of the appeals by the appellate authority and, thereafter, by the Tribunal, was only on the ground of limitation and not on the merits of the matter. A decision based purely on technicalities would not be binding on the writ Court on the strength of the principle of res judicata. Further, as the fate of the appeals, be it before the appellate authority or the Tribunal, was already sealed owing to the limitation prescribed under Section 35(1) of the Act of 1944, they were, in reality, no longer effective appellate remedies available to the petitioner company. Failure to challenge the said orders would therefore not impact the maintainability of the present writ petitions filed only against the Orders-in-Original.

12. As the remedy of appeal to the Commissioner (Appeals) is provided under Section 35(1) of the Act of 1944,

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

invocation of such remedy would invariably be subject to the restrictions prescribed in the statute. However, the fundamental issue is whether, when such an appellate remedy stands foreclosed against an Order-in-Original because the appeal is time-barred in terms of the limitation prescribed in the statute, the said Order-in-Original would also be immune to judicial review by this Court in exercise of its extraordinary writ jurisdiction under Article 226 of the Constitution.

13. In our considered opinion, the Constitutional power of judicial review vesting in this Court under Article 226 cannot be whittled down or be made subject to statutory restrictions and parameters prescribed in the context of the remedies provided thereunder. It is only by way of self- imposed restraints that this Court sometimes refuses to exercise its discretionary jurisdiction under Article 226 of the Constitution in a given case."

14. The Full Bench also referred to the Full Bench

judgment of Gujarat High Court in Panoli Intermediate

(India) Pvt. Limited vs. Union of India reported in 2015

(326) ELT 532 (Guj.) where identical issue came up for

consideration. In para 25, the Court held as under:-

"25. In the result, the reference is answered holding that the decisions in M/s.Resolute Electronics Pvt. Ltd.'s case (supra) and Star Enterprise's case (supra), do not constitute good law. A writ petition would lie against an Order-in-Original, against which an appeal was filed and dismissed as time-barred or no appeal had been preferred as it would have been time-barred, provided sufficient grounds are made out warranting exercise of the power of

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

judicial review under Article 226 of the Constitution. In this regard, it would also not be necessary for the writ petitioner to assail the orders, if any, dismissing his appeals as time-barred, be it by the appellate authority or the Tribunal, in the event he chose to invoke such appellate remedies. The writ petitions shall be placed before the appropriate Court for further consideration on merits in the light of the observations made supra. The reference stands answered accordingly."

Thus, is urged that in the given set of circumstances, a

writ petition would lie.

15. The learned Senior Counsel for the petitioner further

submits that the Assessment Order came to be passed

without giving an opportunity of hearing and that even

otherwise the said order is passed beyond the period of

limitation except for the month of March, 2013. Though,

the order impugned states that there was no response to

the show cause notice issued, the learned Senior Counsel

for the petitioner strenuously contends that the said show

cause notice was never served on him and only the order

passed by assessing authority on 31.03.2017 was served

on him in the month of May, 2017. Since the issue of

limitation, which is now pleaded to be a mixed question of

fact and law and as no counter is forthcoming disclosing

the dates as to when the assements for every month came

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

to be filed and also as to the person responsible for passing

the order with delay, pleads that it would be just and

proper to remand the matter back to the assessing

authority to deal with the point raised namely delay in

passing the assessment order.

16. Learned Government Pleader for Commercial Tax,

appearing for the respondents relied upon a judgment of

Hon'ble Supreme Court in Assistant Commissioner (CT)

LTU, Kakinada and Others vs. Glaxo Smith Kline

Consumer Health Care Limited3 to contend that the Full

Bench Judgment of the Combined High Court in ECIL and

the Judgment of the Gujarat High Court in Panoli

Intermediate were held to be at fault by the Hon'ble

Supreme Court and as such, no relief can be claimed

basing on the said judgment.

17. In order to appreciate the same, it would be

appropriate to refer to the relevant paras of the said

judgment, which are as under:-

"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

3 2020 SCC Online SC 440

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

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 and also of the Karnataka High Court in Phoenix Plasts Company vs. Commissioner of Central Excise (Appeal-I), Bangalore. The logic applied in these decisions proceeds on fallacious premise. For, these decisions are premised on the logic that provision such as Section 31 of the 1995 Act, cannot curtail the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This approach is faulty. It is not a matter of taking away the jurisdiction of the High Court. In a given case, the assesse 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

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

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.

xxxxxxx

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 assesse 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."

18. From the judgment of the Hon'ble Supreme court

referred to above, it very clear that the Full Bench decision

of the Composite High Court in ECIL, which has agreed

with the view taken by the Full Bench of Gujarat High

Court in Panoli Intermediate (India) Pvt. Ltd. and also of

the Karnataka High Court in Phoenix Plasts Company vs.

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Commissioner of Central Excise (Appeal-I), Bangalore

reported in 2013 (298) ELT 481 (Kar.), was held to have

proceeded on a fallacious premise, with regard to its

jurisdiction under Article 226 and 227 of the Constitution

of India. The Court held that it is not a matter of taking

away the jurisdiction of High Court.

19. At this stage, it would be appropriate to refer to

paragraph No.19 of the judgment in Glaxo Smith Kline

Consumer Health Care Limited (cited 3 supra). After

referring to the facts of the said case and the findings given

by the High Court, the Hon'ble Supreme Court in last four

lines of the said paragraph held as under:

"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."

In paragraph No. 20 of the said Judgment, the Court while

dealing with the argument of the Respondent namely,

having failed to assail the order passed by the Appellate

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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,

was not accepted, in view of the exposition of the Apex

Court in Raja Mechanical Company Private Limited vs.

Commissioner of Central Excise, Delhi4. The Hon'ble

Supreme Court held that, it is well settled that rejection of

delay application by the Appellate Forum does not entail in

merger of the Assessment Order with that Order.

20. From the judgment of Apex Court in Glaxo Smith

Kline, it is very clear that the request of the Petitioner

therein came to be rejected mainly on the ground of

inability to file an appeal within the prescribed time was

not properly substantiated or explained. Further, the Court

also observed that the Order of the High Court does not

indicate violation of principles of natural justice or non-

compliance of statutory requirements in any manner. The

Court also held that the Order of assessment does not get

merged with the order rejecting the request to condone the

delay.

(2012) 12 SCC 613

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21. That being the position, in the instant case, the

Appellate Authority as well as VAT Tribunal, categorically

held that there was sufficient cause for preferring the

appeal with delay, but, as they have no power to extend the

period of limitation, rejected the appeals. Apart from that,

it is also urged that, the assessment order came to be

passed without giving an opportunity of hearing and there

is no material to show that the show-cause notice was

served on the Petitioner. Since, the delay in filing the

appeals was explained and the reason given by the

Petitioner was accepted, but the delay was not condoned

due to limitation prescribed under the Act and as the

Assessment Order is said to have passed without giving an

opportunity of hearing, more particularly, the non-service

of show-cause notice, we feel that it is a fit case where the

matter requires reconsideration.

22. Accordingly, the Writ Petitions are disposed of

setting aside the Orders under challenge, in both the writ

petitions and the matters are remanded back to the

Assessing Authority to deal with the same afresh in

accordance with law. There shall be no order as to costs.

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Miscellaneous petitions pending, if any, shall stand

closed.

_______________________________ JUSTICE C.PRAVEEN KUMAR

_________________________________ JUSTICE A.V. RAVINDRA BABU

Date: 29.09.2022 Note: LR copy to be marked B/o.MS

CPK, J & AVRB,J W.P.Nos.3905 & 3795 of 2021

THE HON'BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

THE HON'BLE SRI JUSTICE A.V. RAVINDRA BABU

Writ Petition Nos.3905 AND 3795 of 2021 (per the Hon'ble Sri Justice C. Praveen Kumar) Date:29.09.2022

MS