Gujarat High Court
State Of Gujarat vs P.S.L. Limited on 14 March, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, Sonia Gokani
O/OJCA/748/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CIVIL APPLICATION NO. 748 of 2013
In STAMP NUMBER NO. 3277 of 2013
With
CIVIL APPLICATION NO. 749 of 2013
In
STAMP NUMBER NO. 3274 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MS JUSTICE SONIA GOKANI
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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STATE OF GUJARAT....Applicant(s)
Versus
P.S.L. LIMITED....Respondent(s)
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Appearance:
MR JAIMIN GANDHI, LD.ASST.GOVERNMENT PLEADER for the Applicant-
State.
MR PC JOSHI, LD.COUNSEL WITH MR. MANISH K KAJI, ADVOCATE for the
Page 1 of 24
O/OJCA/748/2013 JUDGMENT
Opponent.
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CORAM: HONOURABLE MR.JUSTICE AKIL
KURESHI
and
HONOURABLE MS JUSTICE SONIA
GOKANI
Date : 14/03/2014
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. These Civil Applications seeking condonation of delay in respective Tax Appeals have been filed by the State. In the Tax Appeals, a common judgment of the Value Added Tax Tribunal (hereinafter referred to as 'the Tribunal'), is challenged.
2. The learned Assistant Government Pleader Shri Jaimin Gandhi for the applicantState pointed out that the tax effect in these two appeals is more than Rs.21 crore. Since there was a delay of 342 days in filing the respective Tax Appeals, these Civil Applications came to be filed. Such delay is sought to be condoned on the basis of averments made in the delay condonation Page 2 of 24 O/OJCA/748/2013 JUDGMENT application as well as in further affidavit dated February 20, 2014 filed by the applicantState.
3. Such prayer for condonation of delay is strongly opposed by the opponent. The objections of the opponent are two fold. Firstly, it is contended that the Court has no power to condone the delay at all. Elaborating this contention, the counsel Shri P.C. Joshi for the opponent drew our attention to sections 77 and 78 of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as 'the Act'), to contend that section 5 of the Limitation Act, 1963, would have no application. Referring to section 84 of the Act, he contended that the power to extend limitation rests only with the Appellate Authority or the Tribunal and not with the High Court. He placed heavy reliance on the decision of the Bombay High Court in the case of Commissioner of Sales Tax v. N.H. Polymers, reported in (2008) 13 VST 73, in which referring to the provisions of Bombay Sales Tax Act, the Court took the view that section 5 of the Limitation Act would have no Page 3 of 24 O/OJCA/748/2013 JUDGMENT application to the proceedings arising under the Bombay Sales Tax Act.
3.1 The second opposition of the opponent pertains to explanation rendered by the applicant for the delay caused in filing the appeal. It was contended that there was gross delay. Explanation was not satisfactory. The delay, therefore, should not be condoned.
4. The learned Assistant Government Pleader Mr.Gandhi, however, drew our attention to a decision of the Division Bench of this Court in the case of State of Gujarat v. M/s.Rama Newsprint & Papers Ltd., dated January 18, 2011, rendered in Tax Appeal No.303 of 2010 in Stamp No.789 of 2010, where the question of High Court's power to condone delay in the appeals filed under section 78 of the Act came to be considered. With respect to the cause of delay, the learned Assistant Government Pleader relied on two affidavits on record. He further submitted Page 4 of 24 O/OJCA/748/2013 JUDGMENT that the tax implication is very large. The delay should, therefore, be condoned.
5. Taking up the first question of power of the High Court to condone the delay in the Tax Appeal presented under section 78 of the Act, we may refer to the statutory provisions concerned. ChapterIX of the Act pertains to an appeal, revision, reference and rectification. Section 78 of the Act, which is a part of the said Chapter IX pertains to an appeal to the High Court. Sub section (1) thereof provides that an appeal shall lie to the High Court against every order passed in appeal by the Tribunal, if the Court is satisfied that the case involves a substantial question of law. Subsection (6) of section 78 of the Act provides that the appeal shall be filed within 90 days from the date of communication of the order of the Tribunal and shall be accompanied with a fee of Rs.200/.
6. Section 77 of the Act provides that in computing the period laid down under sections 73, 75 and 78 Page 5 of 24 O/OJCA/748/2013 JUDGMENT of the Act and provisions of sections 4 and 12 of the Limitation Act shall also as far as apply. It is on account of this provision that the counsel for the opponent contended that section 5 of the Limitation Act would have no application. The Bombay High Court in the case of N.H. Polymers (supra) had examined somewhat similar provision contained in the Bombay Sales Tax Act and opined that by necessary implication section 5 of the Limitation Act would be excluded. The issue, however, does not rest here. In which case, we must refer to section 84 of the Act, which is contained in ChapterX pertaining to the proceedings. Section 84 of the Act reads as under
:
"84. Extension of period of limitation in certain cases :
An appellate authority may admit any appeal or permit the filing of a memorandum of cross objections under section 73 and the Tribunal may admit an application under section 75 or under section 78 after the period of limitation laid down in the said sections, if the appellant or the applicant Page 6 of 24 O/OJCA/748/2013 JUDGMENT satisfies the appellate authority or the Tribunal, as the case may be, that he had sufficient cause for not preferring the appeal or filing a memorandum of cross objections or making the application, within such period."
7. In clear terms, this section 84 of the Act empowers the Court competent to hear the appeals under section 78 of the Act and to accept such appeals after the period of limitation has expired, provided that the Court is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of limitation. It is true that in section 84 of the Act, the reference is to the Appellate Authority of the Tribunal. There is no specific mention to the High Court. Nevertheless what is of significance is that such power to condone the delay on being satisfied that the appellant had sufficient cause preventing him from preferring appeal, is available in the case of an appeal preferred under section 78 of the Act also. Section 78 of the Act, as we noticed, pertains to an appeal to the High Court. Under the Page 7 of 24 O/OJCA/748/2013 JUDGMENT circumstances, the legislature intended to empower the High Court also to condone the delay for sufficient cause in the case of appeals filed under section 78 of the Act. This is precisely what this Court in the case of Rama News Print and Papers Ltd. (supra) held in the following terms :
"19. As noticed above, section 84 specifically provides for admitting an application under section 78 of the Act by the Tribunal after the prescribed period of limitation. Whereas, section 78 of the Act provides for appeal (not application) to the High Court. No power is vested in the Tribunal under section 78 of the Act. Thus, if section 84 of the Act is construed literally, the same results into an absurdity, inasmuch as the words section 78 are rendered meaningless. It appears that though the intention of the legislature was to make the provisions of section 84 applicable to appeals to the High Court under section 78 of the Act, due to some error on the part of the draftsman, the words "the High Court may admit an appeal"
have been accidentally omitted before the words "under section 78". Since section 78 has in fact been included in section 84 of Page 8 of 24 O/OJCA/748/2013 JUDGMENT the Act, unless such an interpretation is adopted, namely, that the legislature has through inadvertent error, left out the words "the High Court may admit an appeal"
in the said provisions, the words "under section 78 of the Act" would become meaningless. Though it is not permissible to read words in a statute which are not there, but where the alternative lies between either supplying by implication words which appear to have been accidentally omitted, or adopting a construction which deprives certain existing words of all meaning, it is permissible to supply the words. In the present case, unless the words "and the High Court may admit an appeal" are read to be existing before the words "under section 78", the words "under section 78" would lose all meaning. In the circumstances, adopting a purposive interpretation, the words "the High Court may admit an appeal" have to be read into section 84 of the Act.
20. The Supreme Court in the case of Surjit Singh Kalara v. Union of India, (1991) 2 SCC 87, has held thus:
"19. True it is not permissible to read words in a statute which are not there, but "where the alternative lies between either supplying by implication words which appear Page 9 of 24 O/OJCA/748/2013 JUDGMENT to have been accidentally omitted, or adopting a construction which deprives certain existing words of all meaning, it is permissible to supply the words" (Craies Statute Law, 7th edn., p. 109). Similar are the observations in Hameedia Hardware Stores v. B. Mohan Lal Sowcar where it was observed that the court construing a provision should not easily read into it words which have not been expressly enacted but having regard to the context in which a provision appears and the object of the statute in which the said provision is enacted the court should construe it in a harmonious way to make it meaningful. An attempt must always be made so to reconcile the relevant provisions as to advance the remedy intended by the statute. (See: Sirajul Haq Khan v. Sunni Central Board of Waqf.)
21. Thus, reconciling the relevant provisions, it is apparent that section 84 of the Act provides for extension of period of limitation even in respect of appeal to the High Court under section 78 of the Act.
22. In Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd.,(2008) 4 SCC 755, the Supreme Court reiterated the aforesaid view and held thus:Page 10 of 24
O/OJCA/748/2013 JUDGMENT
52. No doubt ordinarily the literal rule of interpretation should be followed, and hence the court should neither add nor delete words in a statute. However, in exceptional cases this can be done where not doing so would deprive certain existing words in a statute of all meaning, or some part of the statute may become absurd.
53. In the chapter on "Exceptional Construction" in his book on Interpretation of Statutes, Maxwell writes:
"WHERE the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence. This may be done by departing from the rules of grammar, by giving an unusual meaning to particular words, by altering their collocation, by rejecting them altogether, or by interpolating other words, under the influence, no doubt, of an irresistible conviction that the legislature could not possibly have intended what its words signify, and that the modifications thus Page 11 of 24 O/OJCA/748/2013 JUDGMENT made are mere corrections of careless language and really give the true meaning."
54. Thus, in Surjit Singh Kalra v. Union of India this Court has observed that sometimes courts can supply words which have been accidentally omitted.
55. In G.P. Singh's Principles of Statutory Interpretation, 9th Edn., 2004 at pp. 7174 several decisions of this Court and foreign courts have been referred to where the court has added words to a statute (though cautioning that normally this should not be done).
23. In the light of the aforesaid discussion, the contention raised on behalf of the respondent that the High Court has no power to condone the delay in respect of an appeal preferred under section 78 of the Act, does not merit acceptance and is, accordingly, rejected."
8. Coming to the question of explanation for delay, we notice that in the application for condonation, it was stated as under :
"4. xxx xxx xxx Page 12 of 24 O/OJCA/748/2013 JUDGMENT After receiving the judgment/ order from the Tribunal, it is required to study the judgment and then opinions of several officers are sought as whether to file the Tax Appeal. Thereafter, the department sends a proposal to the Finance Department to get the approval of the Government to file the Tax Appeal. After receiving the approval from the Finance Department, all the papers along with the Judgment/ Order are to be submitted to the G.P. Office to file the Tax Appeal. And thereafter, the G.P. Office after receiving the papers prepares, gets approved and then files Tax Appeal before this Honourable Court.
The applicant further says that, in the present case, the Tribunal passed the order on 27.09.2012, in Second Appeal No.54 of 2011. The applicant says that the order dated 27.09.2012 was communicated to the Applicant on 10.10.2012. Thereafter, on 21.06.2013, the proposal to file the tax appeal was sent to the Finance Department of the State, and on 24.07.2013 the Finance Department approved the proposal. After receiving the proposal from the Finance Department, on 29.07.2013, relevant papers along with Judgment/ order were handed over to the office of the Government Pleader (Gujarat High Court) on 13.08.2013 to file Page 13 of 24 O/OJCA/748/2013 JUDGMENT the Tax Appeal. The applicant says that, the tax appeal was required to be filed on or before 07.01.2013. However, the same was filed on 16.12.13 and thus there is a delay of 342 days in preferring tax appeal."
9. In the further affidavit, reasons were reproduced as under :
"3. I humbly submit that the certified copy of the said judgment was received by the department on 10.10.2012. Thereafter, on 21.02.2013 the Commercial Tax Department filed Rectification Application No.9 10/2013, U/s 79 of the Gujarat Value Added Tax Act, 2003 before the Tribunal, but all efforts in vain, because on 21.03.2013 the Tribunal rejected the rectification applications. Thereafter the Commercial Tax Department sent a proposal to the Finance Department, Gandhinagar for challenging the judgment dated 27.09.2012, on 21.06.2013. It was in lieu of this proposal, the Finance Department has granted permission on 24.07.2013. I further submit that, on receipt of the said permission from the Legal Department, all the relevant papers were sent by the Commercial Tax Department to "KAYDA BHAVAN" Government Pleader's Office, High Court Campus, Sola, Ahmedabad Page 14 of 24 O/OJCA/748/2013 JUDGMENT for filing tax appeal challenging the judgment and order dated 27.09.2012 passed in Second Appeal No.54 of 2011. That said papers were received by the Officer of the Government Pleader on 13.08.2013, and necessary follow ups were taken in this regard by the Commercial Tax Department, but due to heavy work load at the GP Office Tax Appeal could not be filed in earlier, though delayed from very beginning due to Government Procedural work.
4. I humbly submit that for the reason mentioned hereinabove, the present tax appeal is filed at the belated stage having delay about ____ days.
5. I humbly submit that all the genuine efforts were made by the Office of the Government Pleader as well as office of the Commercial Tax Department to file the tax appeal at least within reasonable period. I further submit that the said delay may be condoned considering the fact due to heavy pressure of workload, which is a true fact, it cannot be filed within reasonable time period."
10. In addition to such explanation, we, of course, refer largely to the administrative Page 15 of 24 O/OJCA/748/2013 JUDGMENT consideration at various levels of screening before the appeal is filed. We cannot lose sight of the fact that the appeal involves revenue implication of Rs.21 crore. In the case of State of Gujarat v. Tolat Electronics, decided on August 23, 2013 while dealing with Civil Application No.385 of 2013 in Stamp No.1776 of 2013, this Court had condoned the delay making following observations :
"12. This Court in the case of State of Gujarat vs. Welspun Gujarat Stahl Rohren Ltd. (supra) allowed the condonation of delay by holding thus: " We are conscious that there is a considerable delay in filing the Tax Appeal. We are also aware that much of the delay is attributable to the time consumed in the office of the Government Pleader in drafting the Tax Appeal. We are equally aware that in large number of tax appeals filed by the Government after a long delay, we had not accepted such a ground for condoning the delay. We may, however, notice that in such cases, the delay was inordinate and in majority of those cases, delay was more than 1200 days and in some cases, it crossed 1700 days.Page 16 of 24
O/OJCA/748/2013 JUDGMENT In the present case, however, we find for the reasons recorded thereinafter, such delay is required to be condoned.
Firstly, in our opinion, the affidavit contents of which are noted above, renders reasonable explanation for such delay and gives reasons why appeal could not be presented within the prescribed time limit. It is pointed out that upon receipt of the judgment of the Tribunal, after obtaining opinion of the concerned officers, a decision was taken for filing the appeal. Approval from the Finance Department had thereafter, to be obtained. After obtaining such approval, necessary papers were handed over to the office of Government Pleader, Gujarat High Court. Due to heavy work load and shortage of staff, considerable time was consumed in the office of the Government Pleader in drafting such appeal. It is contended that the appeal involves substantial question of law. Simultaneously, we also notice that the duty amount involved in the present case is in excess of Rs.6 Crores.
In our opinion, looking to the nature of delay, explanation rendered by the appellant in various affidavits and the tax Page 17 of 24 O/OJCA/748/2013 JUDGMENT impact in the appeal, we would be inclined to condoned the delay. We would not in the case of this nature, like to dismiss the State appeal without consideration on merits. The applicant has correctly placed reliance on the observation of Supreme Court in case of Commissioner of Income Tax V. West Bengal Infrastructure Development Finance Corporation Ltd, reported in [2011] 334 ITR 269 (SC), in which it was observed thus :
"5. Looking to the amount of tax involved in this case, we are of the view that the High Court ought to have decided the matter on the merits. In all such cases where there is delay on the part of the Department, we request the High Court to consider imposing costs but certainly it should examine the cases on the merits and should not dispose of cases merely on the ground of delay, particularly when huge stakes are involved."
In case of State of Nagaland V. Lipok AO & Ors., reported in (2005) 3 Supreme Court Cases 752, it was observed as under :
"13. Experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) Page 18 of 24 O/OJCA/748/2013 JUDGMENT and the inherited bureaucratic methodology imbued with the notemaking, filepushing, and passingonthebuck ethos, delay on its part is less difficult to understand though more difficult to approve. The State which represents collective cause of the community, does not deserve a litigantnon grata status. The courts, therefore, have to be informed with the spirit and philosophy of the provision in the course of the interpretation of the expression of sufficient cause. Merit is preferred to scuttle a decision on merits in turning down the case on technicalities of delay in presenting the appeal. Delay as accordingly condoned, the order was set aside and the matter was remitted to the High Court for disposal on merits after affording opportunity of hearing to the parties. In Prabha v. Ram Parkash Kalra (1987 Supp SCC
339), this Court had held that the court should not adopt an injusticeoriented approach in rejecting the application for condonation of delay. The appeal was allowed, the delay was condoned and the matter was remitted for expeditious disposal in accordance with law.
14. In G. Ramegowda, Major v. Spl. Land Acquisition Officer (1988 (2) SCC 142), it was held that no general principle saving Page 19 of 24 O/OJCA/748/2013 JUDGMENT the party from all mistakes of its counsel could be laid. The expression "sufficient cause" must receive a liberal construction so as to advance substantial justice and generally delays in preferring the appeals are required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of delay. In litigations to which Government is a party, there is yet another aspect which, perhaps, cannot be ignored. If appeals brought by Government are lost for such defaults, no person is individually affected, but what, in the ultimate analysis, suffers is public interest. The decisions of Government are collective and institutional decisions and do not share the characteristics of decisions of private individuals. The law of limitation is, no doubt, the same for a private citizen as for governmental authorities. Government, like any other litigant must take responsibility for the acts, omissions of its officers. But a somewhat different complexion is imparted to the matter where Government makes out a case where public interest was shown to have suffered owing to acts of fraud or bad faith on the part of its officers or agents and where the officers were clearly at cross purposes with it. It was, therefore, held Page 20 of 24 O/OJCA/748/2013 JUDGMENT that in assessing what constitutes sufficient cause for purposes of Section 5, it might, perhaps, be somewhat unrealistic to exclude from the consideration that go into the judicial verdict, these factors which are peculiar to and characteristic of the functioning of the Government.
Government decisions are proverbially slow encumbered, as they are, by a considerable degree of procedural redtape in the process of their making. A certain amount of latitude is, therefore, not impermissible. It is rightly said that those who bear responsibility of Government must have "a little play at the joints". Due recognition of these limitations on governmental functioning - of course, within reasonable limits is necessary if the judicial approach is not to be rendered unrealistic. It would, perhaps, be unfair and unrealistic to put Government and private parties on the same footing in all respects in such matters. Implicit in the very nature of Governmental functioning is procedural delay incidental to the decisionmaking process. The delay of over one year was accordingly condoned.
15. It is axiomatic that decisions are taken by officers/agencies proverbially at slow pace and encumbered process of pushing the files from table to table and keeping it on Page 21 of 24 O/OJCA/748/2013 JUDGMENT table for considerable time causing delay intentional or otherwise is a routine. Considerable delay of procedural redtape in the process of their making decision is a common feature. Therefore, certain amount of latitude is not impermissible. If the appeals brought by the State are lost for such default no person is individually affected but what in the ultimate analysis suffers, is public interest. The expression "sufficient cause" should, therefore, be considered with pragmatism in justice oriented approach rather than the technical detection of sufficient cause for explaining every day's delay. The factors which are peculiar to and characteristic of the functioning of the governmental conditions would be cognizant to and requires adoption of pragmatic approach in justiceoriented process. The court should decide the matters on merits unless the case is hopelessly without merit. No separate standards to determine the cause laid by the State visa vis private litigant could be laid to prove strict standards of sufficient cause. The Government at appropriate level should constitute legal cells to examine the cases whether any legal principles are involved for decision by the courts or whether cases require adjustment and should authorise the officers to take a decision or give Page 22 of 24 O/OJCA/748/2013 JUDGMENT appropriate permission for settlement. In the event of decision to file appeal needed prompt action should be pursued by the officer responsible to file the appeal and he should be made personally responsible for lapses, if any. Equally, the State cannot be put on the same footing as an individual. The individual would always be quick in taking the decision whether he would pursue the remedy by way of an appeal or application since he is a person legally injured while State is an impersonal machinery working through its officers or servants.
16. The above position was highlighted in State of Haryana v. Chandra Mani and Ors. (1996 (3) SCC 132); and Special Tehsildar, Land Acquisition, Kerala v. K.V. Ayisumma (1996 (10) SCC 634). It was noted that adoption of strict standard of proof sometimes fail to protract public justice, and it would result in public mischief by skilful management of delay in the process of filing an appeal." It could thus be seen that though like any other litigant, the State authorities are also equally bound by the law of limitation, recognizing certain elements of public interest and the impersonal and slow moving machinery of the Government, the Courts have moulded their Page 23 of 24 O/OJCA/748/2013 JUDGMENT approach, while considering request of the State for condoning the delay. In the present case, as already noticed, explanation in the form of administrative clearances and consumption of time in the office of the Government Pleader in preferring the appeals are pressed in service for explaining the delay. Further, the duty amount involved in the appeal is also substantially large. Considering these aspects of the matter, delay is condoned by awarding cost of Rs.15,000/, which shall be paid to the respondent within four weeks from today."
11. Under the circumstances, the delay is condoned in filing both the appeals on condition that the applicant pays costs of Rs.25,000/ (Rupees Twenty Five Thousand only) in each of the appeals, which shall be done latest by April 30, 2014. Civil Applications are disposed of. Rule is made absolute accordingly in both the applications.
(AKIL KURESHI, J.) (MS SONIA GOKANI, J.) Aakar Page 24 of 24