Allahabad High Court
M/S Bharat Sanchar Nigam Ltd.Barabanki ... vs Commissioner Of Commercial Tax Gomti ... on 31 May, 2018
Author: Irshad Ali
Bench: Irshad Ali
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?A.F.R. Court No. - 17 Case :- TRADE TAX REVISION No. - 35 of 2018 Applicant :- M/S Bharat Sanchar Nigam Ltd.Barabanki Throu,Authorised Sign Opposite Party :- Commissioner Of Commercial Tax Gomti Nagar Lko.And Another Counsel for Applicant :- Pradeeo Agrawal Counsel for Opposite Party :- C.S.C. Hon'ble Irshad Ali,J.
Heard learned counsel for the revisionist.
Learned Chief Standing Counsel has accepted notice on behalf of respondent nos. 1 and 2.
By means of the present revision the revisionist is challenging the judgment and order passed by the Commercial Trade Tax Tribunal, Bench-I, Lucknow dated 30.12.2017 for the Assessment Year 2004-05. The appeal was filed against the judgment and order dated 13.04.2011 passed by the learned Addl. Commissioner Grade-II (Appeal)-5, Commercial Tax Lucknow Sri G.N. Gupta in First Appeal No. 1216 of 2010 for the annual year 2004-05 under Section 7(3) read with Section 30 of the U.P. Trade Tax Act, 1948.
Brief fact of the case is that the revisionist is Government of India undertaking, exclusive deal in providing telecommunication services as provided by the Indian Telegraph Act, 1885. The function providing the telecommunication services to the consumer prior to 30th September, 2000 was the department of telecommunication i.e. Union of India. In the year 2000 the Union Government, under a policy decision, decided to retain the power to issue the license only and created a corporate body under the provisions of the Indian Companies Act, 1956, which is a public sector undertaking for providing telecommunication services to the consumers.
The revisionist is a registered assessee registered under the U.P. Trade Tax Act in the office of Commercial Trade Tax Department, Deputy Commissioner, Barabanki U.P. The sole object and function of the revisionist is to provide telecommunication services for which the revisionist has been granted a license from the department of telecommunication. The revisionist provides telecommunication services to consumers through various equipments installed in the exchange established all over the country except two metro cities, namely, Delhi and Mumbai.
There are two different telephones switches connected to each other through local access systems like copper cable or though wireless equipments from the local telephone exchange to the premises of the consumers. It is optional for the consumers to take telephone instruments from the revisionist or purchase the same from the open market.
The role of exchange to connect two subscribers is very important as without which the connectivity of two subscribers are towers i.e. which enable the subscriber to connect the desire number either of the given any individual subscriber.
There is no agreement of any kind in regard to the telecommunication services has ever been executed by the revisionist with the consumer for providing any right of any kind to use such equipments installed subscriber for transferring of any right of any kind either for use the equipment installed in the exchange or for exchange use of exchange.
The Deputy Commissioner, Trade Tax, Barabanki has passed the assessment order dated 17.12.2007 under Section 7(3) of the U.P. Trade Tax Act for the Assessment Year 2004-05.
Feeling aggrieved by the Assessment Order dated 17.12.2007, the revisionist preferred an appeal before the Additional Commissioner Grade-II (Appeal)-5, Lucknow, which was registered as Appeal No. 1216/10 AY-2004-05, which has been dismissed on 13.04.2011 by the first appellate authority.
Feeling aggrieved by the order dated 13.04.2011 the revisionist preferred an appeal, being Defective Appeal No. 38 of 2013, before the Commercial Trade Tax Tribunal Bench-I, Lucknow, which has also been dismissed vide judgment and order dated 13.12.2017 on the issue of delay.
The judgment and order dated 13.12.2017 is subject matter of challenge before this Court in the present revision on the ground that the Appellate Tribunal would have considered the reasons assigned in challenging the judgment and order dated 13.04.2011 and would have decided he controversy on merits.
The present revision has been filed on following substantial questions of law:
1. ?Whether the Learned Tribunal was justified in not considering the decisions of the Apex Court in the case of Bharat Sanchar Nigam Ltd. Vs Union of India reported in (2006) 3 SCC as well as the decision of the Apex Court in the case of Idea Mobile Communication Ltd. Vs. CCE & Customs, Cochin reported in (2011) 12 SCC 608 wherein it has categorically held that the rentals of the basic telephone as well as the supply of SIM cards is not liable to be taxed?.
2. ?Whether the Learned Tribunal was justified in not considering the fact that the electromagnetic waves and radio frequencies are not ?goods? within the meaning of the word either in Article 366(29-A)(d) or in the state legislation as held by the Apex Court?.
3. ?Whether the Learned Tribunal was justified in not considering the fact that the service tax has been paid by the Applicant in the respective years in view of Section 65(72) of the Finance Act, 1994 and therefore it cannot be deemed to be a sale?.
4. ?Whether the learned Tribunal was justified in rejecting the appeal on technical issue of condonation of delay, when a meritorious matter like this on merit has been decided by the Apex Court and it has been held that the electromagnetic waves and radio frequencies are not ?goods? and thus cannot be subjected to tax?.
5. ?Whether the learned Tribunal was justified to impose tax despite the decision of the Apex Court on 2.3.2006 in the case of Bharat Sanchar Nigam Ltd. vs. Union of India reported in (2006) 3 SCC page 1, wherein it has been held that the telecommunication services cannot be subjected to tax and the said decision is binding under Article 141 of the Constitution of India on all courts in India?.
6. ?Whether the learned Tribunal was justified in passing the impugned order without proper application of mind, which in clearly in violation of law laid down by the Apex Court as well as by this Hon?ble Court?.
7. Whether the learned Tribunal was justified in ignoring the law laid down by this Hon?ble Court and passed the impugned order on extraneous consideration, which has vitiated the findings and the Tribunal has recorded perverse findings of fact?.
Learned counsel for the revisionist submitted that the activity of the revisionist does not fall within the category of service and are not liable to tax in view of the catena of decisions of the Hon?ble Supreme Court. Therefore, rejection of appeal on the technical ground is not justifiable in law.
In regard to the delay in filing the second appeal the reason was assigned under affidavit filed along with the memo of appeal but the second appellate authority, without taking into consideration the explanation of delay, has proceeded to dismiss the appeal on the ground that it is barred by time.
Learned counsel for the revisionist submitted that he has explained sufficient cause in regard to the delay occasioned in approaching the Tribunal. He relied upon the judgment of the Hon?ble Supreme Court in the case of 1987 UPTC 2128, (SC) and submitted that expression ?sufficient cause? employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner, which subserves the ends of justice-that being the life purpose of the existence of the institution of courts. The Supreme Court has been making a justifiably liberal approach in matters instituted before it.
He further placed reliance upon the judgment in the case of Parimal vs. Veena alias Bharti, reported in (2011) 3 SCC 545 and submitted that purpose of Limitation Act was not to destroy the rights and primary function of a Court is to adjudicate dispute between the parties and to advance substantial justice. If the explanation given does not smack of mala fide or is not shown to have been put forth as a part of a time dilation strategy, the Court must show utmost consideration to the litigant.
Therefore, learned counsel for the revisionist submitted that the Commercial Trade Tax Tribunal, Bench-I, Lucknow, without appreciating the correct factual and legal position, has proceeded to pass the judgment by dismissing the appeal as barred by time, which is not sustainable in law and is liable to be interfered by this Court.
Per contra learned Addl. Chief Standing Counsel appearing on behalf of the respondent nos. 1 and 2 vehemently submitted that there are inordinate delay in filing the appeal before the learned Tribunal. The revisionist has not submitted sufficient material to establish that the delay occasioned is not deliberate. Therefore, no illegality has been committed by the Tribunal in rejecting the appeal as time barred. The revision lacks merit and is liable to be dismissed.
Having heard learned counsel for the parties and perused the material on record.
On perusal of the impugned judgment passed by the Commercial Trade Tax Tribunal, Bench-I, Lucknow, it is evident that the appeal filed by the revisionist has been dismissed as barred by time.
In the judgment passed in the case of Collector, Land Acquisition vs. Mst. Katiji; 1987(2) SCC, page 107, the Hon?ble Supreme Court has held as under:
?The expression ?sufficient cause? employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner, which subserves the ends of justice-that being the life purpose of the existence of the institution of courts. The Supreme Court has been making a justifiably liberal approach in matters instituted before it.?
When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of anon-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. The judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.?
The Apex Court, while dealing a matter of delay on the object of doing substantial justice in the case of Parimal vs. Veena alias Bharti (supra), in paragraph 15 has held as under:
?While deciding whether there is sufficient cause or not, the court must bear in mind the object of doing substantial justice to all the parties concerned and that the technicalities of the law should not prevent the court from doing substantial justice and doing away the illegality perpetuated on the basis of the judgment impugned before it. (Vide State of Bihar v. Kameshwar Prasad Singh, Madanlal vs. Shyamlal, Davinder Pal Sehgal v. Partap Steel Rolling Mills(P) Ltd., Ram Nath Sao v. Gobardhan Sao , Kaushalya Devi v. Prem Chand, Srei International Finance Ltd. v. Fairgrowth Financial Services Ltd.. and Reena Sadh v. Anjana Enterprises)?.
The Tribunal in dealing the matter on the subject of delay has ignored the ratio decided by the Hon?ble Supreme Court in the aforesaid judgments.
The purpose of Limitation Act was not to destroy the rights and primary function of a Court is to adjudicate dispute between the parties and to advance substantial justice. If the explanation given does not smack of mala fide or is not shown to have been put forth as a part of a time dilation strategy, the Court must show utmost consideration to the litigant.
If the State is a applicant, praying for condonation of delay, it is common knowledge that on account of impersonal machinery and the inherited bureaucratic methodology imbibed, delay on the part of the State is less difficult to understand, but it is also true that the State represent the collective cause of the community and considerable delay of procedural red tape in the process of making decision is a common feature. Therefore, certain amount of latitude is not impermissible.
The learned Tribunal, without appreciating the correct factual and legal position, has proceeded to pass judgment dismissing the appeal as time barred. Therefore, the impugned judgment is not sustainable in law.
On perusal of the judgment relied upon by the learned counsel for the revisionist, it is apparent on the face of it that the Hon?ble Supreme Court by considering the expression ?sufficient cause? has held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of anon-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. The judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do the justice without dealing the technical issues on the point involved.
In view of the above, the Court finds that while passing the judgment and order dated 13.12.2017 in Defective Appeal No. 38 of 2014 the Tribunal has committed gross illegality in not considering the ratio of the judgments referred to herein above and has dismissed the appeal as time barred.
Therefore, it is well established that the impugned judgment and order dated 13.12.2017 suffers from manifest error of law and is hereby set aside.
The revision succeeds and is allowed.
The matter is remanded to the Commercial Trade Tax Tribunal, Bench-I, Lucknow with a direction to decide the Defective Appeal No. 38 of 2014 on merit in light of the judgment of the Hon?ble Supreme Court relied by the revisionist within a period of three months from the date of production of a certified copy of this order.
Order Date :- 31.5.2018 Pkb/