2013 (10) TMI 1285 - HC - VAT and Sales Tax

Restoration of appeal - Appeal withdrawn by advocate of petitioner on account of misunderstanding - Held that - Appeal No. 725 of 2002 (from Final Order dated August 30 2001) was withdrawn by the advocate of the petitioner on account of misunderstanding. This misunderstanding was not without any basis. In fact the Tribunal in its order dated June 29 2005 in Appeal No. 1579 of 2001 (deposit order dated August 2 2001) has at the instance of the joint request of the Revenue and the petitioner remanded the matter to the Deputy Commissioner of Sales Tax (Appeal) to decide the appeal on merits. The facts that there is a difference in an appeal from an interim order and an appeal from final order are intricate matters which could not normally be understood by non-lawyers. In these circumstances no fault can be attributed to the petitioner for having failed to ensure that Appeal No. 725 of 2002 is not withdrawn. In these circumstances it may not be fair for a litigant to suffer on account of lapses on the part of its advocate. - Petitioner undertaken to deposit the amount due - On making of such deposit - Appeal shall be restored - Decided conditionally in favour of assessee.

Summary

Issues: Misunderstanding by advocate leading to withdrawal of appeal, restoration application dismissal, maintainability of second appeal

Issue 1: Misunderstanding by advocate leading to withdrawal of appeal
The petitioner was assessed to Central sales tax (CST) and required to pay a substantial amount. The advocate misunderstood the situation, leading to the withdrawal of the petitioner's second appeal before the Sales Tax Tribunal. This misunderstanding arose from the advocate's belief that a previous appeal had been partly allowed, indicating that the appeal before the first appellate authority would be heard on merits. Despite the advocate's error, the Tribunal remanded the matter to the Deputy Commissioner of Sales Tax (Appeal) to decide the appeal on merits. The High Court acknowledged that the intricacies of appeals from interim orders versus final orders might not be easily understood by non-lawyers, and therefore, the petitioner could not be faulted for the advocate's mistake. Consequently, the High Court allowed the writ petition, setting aside the order that disposed of the second appeal as withdrawn due to the misunderstanding.

Issue 2: Restoration application dismissal
Following the withdrawal of the second appeal, the petitioner filed a restoration application seeking to reinstate the appeal. However, the restoration application was dismissed as it was filed beyond the period prescribed under the Bombay Sales Tax Rules. The High Court noted that the exercise of inherent powers to grant restoration was deemed unjustified by the Tribunal. Despite the dismissal of the restoration application, the High Court found that the petitioner's plight was a result of the advocate's misunderstanding, and therefore, reinstated the second appeal to the file of the Sales Tax Tribunal.

Issue 3: Maintainability of second appeal
Subsequently, the petitioner filed another second appeal against the ex parte final order passed by the Deputy Commissioner of Sales Tax (Appeal). The Sales Tax Tribunal dismissed this appeal, citing that it was not maintainable as the previous appeal against the same order had already been disposed of. The High Court, however, recognized that the initial appeal was withdrawn due to the advocate's misunderstanding and had not been heard on merits. Therefore, the High Court allowed the petition, setting aside the orders that dismissed the second appeal and the restoration application, and restored the second appeal to the Sales Tax Tribunal's file. The High Court also directed the petitioner to pay the outstanding tax liability and interest to revive the second appeal fully.