Gujarat High Court
State Of Gujarat Through vs Dattchandra Shantilal
Author: Akil Kureshi
Bench: Akil Kureshi
STATE OF GUJARAT THROUGH....Applicant(s)V/SDATTCHANDRA SHANTILAL CHUNAWALA & CO....Respondent(s) O/OJCA/169/2013 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CIVIL APPLICATION NO. 169 of 2013 In STAMP NUMBER NO. 572 of 2013 With CIVIL APPLICATION NO. 170 of 2013 In STAMP NUMBER NO. 569 of 2013 ================================================================ STATE OF GUJARAT THROUGH....Applicant(s) Versus DATTCHANDRA SHANTILAL CHUNAWALA & CO....Respondent(s) ================================================================ Appearance:
Mr JAIMIN GANDHI AGP for the Applicant(s) No. 1 M/S PATEL ADVOCATES, ADVOCATE for the Respondent(s) No. 1 ================================================================ CORAM:
HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MS JUSTICE SONIA GOKANI 26th April 2013 COMMON ORDER (PER : HONOURABLE Ms. JUSTICE SONIA GOKANI) Aggrieved by the decision of the Gujarat Value Added Tax Tribunal, Ahmedabad { Tribunal for short} dated 6th December 2010 in Revision Applications No. 104/2010 & 105/2010, the State has preferred Tax Appeals under section 78 of the Gujarat Value Added Tax Act, 2003 { Act for short}.
Vide orders impugned, the Tribunal has quashed the order passed under Section 67 of the Act by the Deputy Commissioner of Commercial Tax, Audit-4, Vadodara for the Year 2002-03 on various grounds. Resultantly, the opponent is held not liable to pay interest and penalty as well. It is urged by the applicant-State that serious question of interpretation of statute are involved in the Tax Appeals, however, the delay has been caused in preferring such appeals of 722 days, and therefore, the present Applications are preferred seeking to condone such delay, putting forth administrative and other reasons while explaining sufficiency of the cause.
On issuance of the notice, the Opponent challenged strenuously such application for condonation of delay and affidavit-in-reply has been filed for and on behalf of the respondent. On detailing the chronology of events, it is urged that the administrative mechanism, if is responsible for such delay, that by itself is not a ground for condonation and the lethargic attitude of the applicant could not serve the cause nor it can benefit it by further getting the relief in its favour. It is further contended that at the time of issuance of notice, additional affidavit was permitted to be filed and that itself is indicative that in the main body of the application, no grounds are sufficiency made out for condonation of delay.
Learned AGP Mr. Gandhi appearing for and on behalf of the applicant-State fervently urged that once the technicality and the substantive law is pitted against each other, tilt must be towards substantive justice. He urged that the Tribunal since has ignored vital aspects of law and not taken into consideration important provisions of the Act and the Gujarat Sales Tax Rules, non condonation of delay would have far reaching effect not only on the tax collection but, also on the question of law. He urged that if the Tax Appeals are not considered on merits, there would be a considerable loss to the public exchequer and therefore, the Court may liberally construe the reasons put forth for explaining the delay. Learned AGP also urged that the intention of the appellant was not to adopt dilatory tactics, however, despite best of the efforts when the appeals could not be filed within the time; considering the details made in the affidavit and further affidavit, the Court may condone the delay.
Per contra, learned advocate Shri Patel appearing for the opponent has fervently objected to grant of these applications. It is urged, inter alia, that minus the additional affidavit, no explanation appears worth considering and even in the additional affidavit, what all the applicant has pleaded is administrative reason for such delay and that should never be construed as sufficient ground for this Court to liberally construe the explanation of the Government. He further urged that the applicant cannot be placed on a higher pedestal than an ordinary citizen when no explanation worth the name has come before the Court, and therefore, delay must not be condoned. He also further urged that delay of each day even if not explained, particularly at every stage why such delay occurred need to be sufficiently explained by the applicant before such application is allowed in a routine manner.
Upon thus hearing both the sides and on considering the pleadings of the parties, these Applications deserve to be allowed for the following reasons:-
This Court is conscious of the fact that the applicant-State is not to be given any unnecessary latitude when the Court is examining reasonability of the explanation offered for delay occurred in filing the Tax Appeals. However, the Court cannot be oblivious of the fact that ordinarily it is substantive justice which must have its play rather than technicality while sustaining or not upholding the say of the parties. As could be noted, in the instant case, the date of order impugned is 6th December 2010. The communication of which was made on 16th December 2010. The proposal has been made on 20th August 2012 and the Finance Department approved it on 21st September 2012. Thereafter, papers were handed over to the office of the Government Pleader and the same was filed on 25th February 2013 and thus the Tax Appeals which were to be filed on or before 16th March 2011 could not be so preferred on account of late proposal sent to the Finance Department for preferring the appeals. What has been explained by the applicant is as follows:-
The applicant further says that, due to government administrative mechanism, every work passes and comes back to source point, through a routine system hence the tax appeal could not be filed within the statutory time limit. Due to administrative procedures time was consumed and hence the delay was caused.
xx xx xx xx The applicant most humbly and most respectfully submits that, it holds this Hon ble Court in high esteem and there has never been any intention to flout any legal provisions or legal formalities. In the present case, the delay is enormous for which there can never be a convincing explanation for it to be condoned. But, the fact is that, despite the best efforts on the part of the applicant, delay has been caused only because of the circumstances beyond control.
In additional affidavit filed by the Assistant Commissioner of Commercial Tax-1, it is stated that :
5. I humbly submit that, all the genuine efforts were made by the office of the Commercial Tax Department to file the Tax Appeal atleast within reasonable period. I further humbly submit that, after submitting the papers in the office of the Government Pleader periodical enquiries were made by the Department to know the status of the matters. At times, the papers already submitted were resubmitted on the request of the Government Pleader Office in the form of photo-copies. It was orally conveyed by the office of the Government Pleader that, due to heavy workload the tax appeal could not be drafted and could not be filed within reasonable time period.
Reliance is also placed on the judgment rendered in case of G. Ramegowda v. Special Land Acquisition Officer, reported in AIR 1988 SC 897 wherein, in paragraph 6 of the judgment, it is observed as under :-
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 the Government are collective and institutional decisions and do not share the characteristics of decisions of private individuals. Therefore, in assessing what, in a particular case, constitutes sufficient cause for the purposes of Section 5 of the Limitation Act, it might, perhaps, be somewhat unrealistic to exclude from the considerations that go into the judicial verdict, these factors which are peculiar to and characteristic of the functioning of the Government. Governmental decisions are proverbially slow encumbered, as they are, by a considerable degree of procedural red-tape 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 Government functioning of course, within a reasonable limit is necessary if the judicial approach is not 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 decision making process..
Reliance is also placed on the decision of Apex Court in case of CIT v. West Bengal Infrastructure Development Finance Corporation Limited, reported in 334 ITR 269 (SC), wherein it is 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 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 merits and should not dispose of cases merely on the ground of delay, particularly when huge stakes are involved.
When similar question was raised before this Court, in case of State of Gujarat v. GMM Co Limited c/o. Manibhai & Brothers Estate [OJ CA No. 341 of 2012 :: Decided on 5th April 2013], it is observed as under :-
In yet another Civil Application No.253/2012 in Stamp No. 1579 of 2012, identical issue had arisen for consideration of this Court. Some of the observations made therein will be relevant for considering this application of condonation of delay, which are as follow:-
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.
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 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 :-
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) and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on- the-buck 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 litigant-non-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 injustice-oriented 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 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 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 red-tape 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 decision-making process. The delay of over one year was accordingly condoned.
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 table for considerable time causing delay - intentional or otherwise - is a routine. Considerable delay of procedural red-tape 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 days 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 justice- oriented 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 vis-a-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 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 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.
Deciding on the line of the above mentioned reasoning, this application deserves to be allowed as well. As can be noted from the case on hand that the applicant has attempted to explain the delay which can be attributed to the administrative reasons and particularly consumption of time at the office of the Government Pleader. This Court needs to take into account the interest of justice and particularly public interest and the question raised in the Tax Appeals is a substantive question of law and the stake involved in these Tax Appeals is also high, this additional aspect cannot be disregarded while condoning the delay. In such circumstances, the Court needs to be alive to the realities when the matters are decided at every stage administratively and recognize the impersonal and slow moving machinery of the Government and needs to accordingly address the issue of condonation of delay put-forth by the State. Giving importance to the substantive justice, rather than to the technicality, the Court shall have to mould its approach accordingly on having found sufficient cause in absence of any deliberate inaction. Resultantly, these applications are allowed by condoning the delay of 722 days. Rule issued in each case is made absolute. Applicant-State, however, shall pay cost of Rs. 20,000/= in each case to the otherside.
{AKIL KURESHI, J.} {Ms. SONIA GOKANI, J.} Prakash* Page 12 of 12