ALD AUTOMOTIVE PRIVATE LIMITED V. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES

STA/10/2021

AI Insights

The case involves ALD Automotive Private Limited, which appealed against the order of the Additional Commissioner of Commercial Taxes, Bengaluru, concerning re-assessment orders for input tax credit claims. The appeal was filed with a significant delay of 1217 days, which the appellant sought to justify based on legal advice and a belief that the matter would be resolved in subsequent proceedings. The court examined the reasons for the delay, the appellant's participation in earlier proceedings, and relevant legal precedents on condonation of delay. Ultimately, the court found the delay unjustifiable and dismissed the appeal.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 742674 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-03-2022
• Assessment Year: misc
• Other Referred Cases: Collector, Land Acquisition, Anantnag and Another vs Mst. Katiji and Others, N. Balakrishnan vs. M. Krishnamurthy, Senior Bhosale Estate (HUF) vs. The Assistant Commissioner of Income Tax, Karnataka Forest Development Corpn. Ltd. vs. Assistant Commissioner of Income-Tax (TDS) Circle 11(3), Bangalore, Esha Bhattacharjee vs Mg.Commit. of Raghunathpur Nafar
• Laws Referred To: KVAT Act, 2003
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: T SURYANARAYANA; TANMAYEE RAJKUMAR
• Keywords: Bonafide belief; Condonation of delay; Input tax credit; Legal advice; Re-assessment order
• Section: 64(1); 66(1)

Judgement Text

" IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF MARCH, 2022 PRESENT THE HON’BLE MRS.JUSTICE S.SUJATHA AND THE HON’BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR S.T.A.No.10/2021 BETWEEN : ALD AUTOMOTIVE PRIVATE LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT UNIT NO.1802, TOWER-A OF PENINSULA BUSINESS PARK GANAPATRAO KADAM MARG LOWER PAREL, MUMBAI-400013. ALSO HAVING OFFICE AT P.B.NO.11635 NARIMAN POINT, 13TH FLOOR MAKER CHAMBER-IV, MUMBAI-400021. REP HEREIN BY ITS ASSISTANT MANAGER Mr. BABU B.R. ...APPELLANT (BY SRI T.SURYANARAYANA, SENIOR COUNSEL A/W SMT.TANMAYEE RAJKUMAR, ADV.) AND : THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, (ZONE) – I, BENGALURU, 6TH FLOOR, VTK-1 VANIJYA THERIGE KARYALAYA GANDHI NAGAR, - 2 - BENGALURU-560009. …RESPONDENT (BY SRI JEEVAN J. NEERALGI, AGA.) THIS STA IS FILED UNDER SECTION 66(1) OF THE KVAT ACT, 2003 AGAINST THE ORDER DATED 11.01.2018 PASSED IN No.ZAC-1/BNG/KVAT/SMR-03/2015-16 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL.TAXES, ZONE I, GANDHINAGAR, BENGALURU, BY SETTING ASIDE THE REVISION ORDER BEARING No.JCCT(ADMN.)/DVO-1/SMR/CR- 06/13-14 DATED 27.02.2015 PASSED BY FRA ALONGWITH REASSESSMENT ORDERS DATED 23.09.2009 PASSED FOR THE TAX PERIODS FROM APRIL 2005 TO MARCH 2008 AND RE-ASSESSMENT ORDERS DATED 01.06.2010 PASSED FOR THE TAX PERIODS FROM APRIL 2008 TO MARCH 2009 AND THE MATTER IS REMANDED BACK TO THE PRESCRIBED AUTHORITY FOR RE-DOING THE RE-ASSESSMENT ORDERS AFRESH IN THE LIGHT OF THE ABOVE OBSERVATION. THIS APPEAL COMING ON FOR ORDERS, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING: J U D G M E N T This appeal is filed under Section 66(1) of the Karnataka Value Added Tax Act, 2003 (‘Act’ for short) challenging the order dated 11.01.2018 passed by the Additional Commissioner of Commercial Taxes, Zone – I, Gandhinagar, Bengaluru, wherein the Additional Commissioner exercising powers under Section 64(1) of the Act has set aside the re-assessment orders relating to the tax periods April 2005 to March 2008 and April 2008 to March 2009 dated 23.09.2009 and 01.06.2010 - 3 - respectively and remanded the matter to the Prescribed Authority for re-doing the re-assessment orders afresh. 2. This appeal is filed with the delay of 1217 days. As such, I.A.No.1/2021 is filed seeking condonation of the said delay of 1217 days in filing the appeal. 3. Learned Senior counsel Sri. T. Suryanarayana appearing for the appellant – assessee submitted that subsequent to the order of remand passed by the Additional Commissioner on 11.01.2018, the appellant was under a bonafide belief that he could satisfy the Authority on the allowability of the input tax credit. However, fresh re-assessment orders were passed on 25.11.2020 and 27.11.2020 for the tax periods in question disallowing the input tax credit claimed by the appellant in the revised returns filed beyond six months. As such, rectification applications were filed before the Assessing Officer, which came - 4 - to be rejected vide order dated 14.12.2020, against which W.P.No.607/2021 was filed by the appellant before this Court on 23.12.2020 challenging the assessment orders as well as rectification order. The Writ Court vide order dated 27.01.2021 had set aside the order dated 14.12.2020 rejecting the applications filed by the assessee and remanded the matter to the Assessing Officer for its reconsideration. At that time, after preparing and filing the writ petition, the appellant was advised to challenge the order dated 11.01.2018. The said delay caused is due to the aforesaid bonafide reasons and not due to negligence. 4. Learned Senior counsel placing reliance on the judgment of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag and Another vs Mst. Katiji and Others reported in (1987) 2 SCC 107 submitted that the Hon’ble Apex Court has laid down the principles in considering the case for - 5 - condoning the delay. In the light of said decision, a liberal and justice oriented approach has to be taken. Nextly, it was argued that there is no adversary litigation, no normal parameters set down under the Limitation Act, 1963 could be made applicable to the tax matters. Learned Senior counsel argued that the tax being paid in the matter related to the refund or claim of income tax credit, there is no revenue loss. Hence, condoning the delay of 1217 days in filing the appeal would not prejudice the rights of revenue. In support of his contentions, the following judgments were referred to: (i) N. Balakrishnan vs. M. Krishnamurthy [(1998) 7 SCC 123]; (ii) Senior Bhosale Estate (HUF) vs. The Assistant Commissioner of Income Tax [Civil Appeal Nos. 6671-6676/2010]; (iii) Karnataka Forest Development Corpn. Ltd. vs. Assistant Commissioner of Income-Tax (TDS) Circle 11(3), Bangalore [(2011) 196 Taxman 445(Karnataka)]. - 6 - 5. Referring to these judgments, it is submitted that no different yardstick could be adopted to the private litigant compared with the State. Learned Senior Counsel further submitted that since no statement of objection is filed by the revenue, the delay has to be condoned and the matter has to be heard on merits. 6. Learned Additional Government Advocate appearing for the revenue refuting the arguments advanced by the learned Senior counsel for the appellant submitted that the affidavit filed by the appellant is self-contradictory. Having admitted the filing of writ petition before this Court on 23.12.2020, no different stand would be taken in filing this appeal is concerned, the appellant having suffered in the consequential re-assessment orders, now cannot challenge the order of the Revisional Authority at this - 7 - belated stage. Accordingly, seeks for dismissal of interlocutory application and consequently the appeal. 7. We have carefully considered the submissions made by the learned counsel appearing for the parties and perused the materials on record. 8. As submitted in the affidavit and reiterated by the learned Senior counsel for the appellant, the sufficient cause shown appears to be the legal advice taken while challenging the consequential re- assessment order in writ petition. As could be seen, the Additional Commissioner of Commercial Taxes has passed the order on 11.01.2018 remanding the matter to the prescribed authority for reconsideration. The explanation offered that the appellant was under the bonafide belief that it would satisfy the prescribed authority to allow the input tax credit itself is manifestly misconceived. The appellant accepting the order of the Addl. Commissioner of Commercial Taxes has - 8 - participated before the prescribed authority pursuant to the remand made by the Addl. Commissioner without raising any grouse against the order of the Addl. Commissioner. The prescribed authority having passed the consequential orders and the appellant being aggrieved by the same, has filed the rectification applications unsuccessfully and thereby filed the writ petition challenging the rectification order and the consequential reassessment order. The aforesaid aspects would denote that the assessee indeed had not chosen to challenge the order of the Addl. Commissioner. Merely for the reason that a legal advice was given to the appellant while preferring the writ petition before this Court, the appeal cannot be entertained with an inordinate delay of 1217 days in filing the appeal. 9. At this juncture, it would be apt to refer to the judgment relied upon by the learned Senior counsel - 9 - for the appellant in the case of Collector, Land Acquisition, Anantnag, supra. The Hon’ble Apex Court has considered the delay of only 4 days in filing the appeal by the State against enhancement amount of compensation for acquisition of land for public purpose. The High Court having dismissed the appeal on hyper- technical ground of bar of limitation with reference to Section 23 of the Land Acquisition Act, 1987 has held that a liberal approach has to be adopted, to apply law in a meaningful manner which serves the ends of justice. 10. In the case of N. Balakrishnan, supra, the Hon’ble Apex Court in the context of litigant engaging the service of the learned counsel for making the motion to set aside the ex-parte decree but the same not having been done and the litigant venting his grievance by claiming compensation against such learned counsel for causing delay of 883 days in filing the application, has - 10 - observed that the conduct of the appellants therein does not on the whole, warrant to castigate him as an irresponsible litigant. It is further observed that condonation of delay is left to the discretion of the Court. Section 5 of the Limitation Act, 1963, does not say that such discretion can be exercised only if the delay is within a certain limit. 11. In the case of Karnataka Forest Development Corpn. Ltd. supra, while considering the appeal filed by the Government Company in condoning the delay of 310 days, the Hon’ble Division Bench of this Court while considering the approach of the Tribunal in not condoning the delay of 310 days has observed that the reason given by the Tribunal for not condoning the delay of 310 days is unsustainable in law. 12. Similarly, in the case of Senior Bhosale Estate, supra, the sufficient cause shown was that the appellants therein had no knowledge of passing of the - 11 - order on 29.12.2003 until June 2008 which fact was not disputed. In that context, the delay of 1754 days was condoned as the appellants therein were confronted with auction notices in June 2008 issued by the competent authority. 13. In the light of these judgments, we have analysed the case on hand. With great respect, that none of the aforesaid judgments would come to the aid of the appellant since it is not the case of the appellant that he was oblivious of the order dated 11.01.2018 passed by the Addl. Commissioner of Commercial Taxes indeed as mentioned herein above, in compliance with the said order, the appellant has participated in the proceedings before the prescribed authority and suffered an order and challenged the same in the writ petition. 14. The arguments advanced by the learned Senior counsel that the normal parameters of the - 12 - Limitation Act, 1963 would not be applicable to the tax matters cannot be countenanced. 15. The period prescribed under Section 5 of the Limitation Act, 1963 though may not be applicable to the tax matters, since the same is prescribed under the statute but the parameters set down for condonation of delay cannot stand on different footing. 16. It is significant to observe that the controversy may not be relating to the collection of tax but the claim of input tax credit would certainly has some effect on the revenue. It cannot be construed as ‘’No revenue loss” as canvassed by the learned counsel for the appellant. Compared to the Government, Private litigant stands on a better pedestal in taking a decision and filing the appeal before the Court. Merely for the reason that in the appeal filed by the Government delay is condoned, the same yardstick cannot be applied blindly but requires to be examined having regard to the - 13 - facts and circumstances of the case. No doubt, delay of 1754 days has been condoned by the Hon’ble Apex Court in the case of Senior Bhosale Estate, supra, but the same is, on considering the satisfactory explanation offered or the cause shown for the delay i.e., it depends on the facts and circumstances of the case, there is no hard and fast rule for condonation of delay. It is the discretionary power vested with the Court, to be exercised judiciously having regard to the facts and circumstances of the case. In this regard, this Court finds it apt to refer to the judgment of the Hon’ble Apex Court in the case of Esha Bhattacharjee vs Mg.Commit. of Raghunathpur Nafar reported in (2013) 12 SCC 649, wherein the Hon’ble Apex Court has distinguished the ordinary delay and inordinate delay and has summarized the legal principles as under: - 14 - “21.8 viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. 21.9 ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. 21.10 x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation. - 15 - 22.1 a) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system. 22.2 b) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective. 22.3 c) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto. 22.4 d) The increasing tendency to perceive delay as a non- serious matter and, hence, lackadaisical propensity can be exhibited in a non-challant manner requires to be curbed, of course, within legal parameters.” - 16 - 17. In the light of the said decision, the inordinate delay of 1217 days in the background of the facts narrated above would certainly come within the purview of Para No.21.8(viii) which cannot be condoned with the liberal approach accepting the cause shown as stated above. 18. In our considered opinion, no ground is found to condone the inordinate delay of 1217 days in filing the appeal. Accordingly, I.A.No.1/2021 is dismissed. Resultantly, the Sales Tax Appeal stands dismissed. Sd/- JUDGE Sd/- JUDGE PMR/SSD "