2025 (5) TMI 1523 - HC - VAT / Sales Tax

Condonation of the delay in filing appeal before the first appellate authority - negligence of a counsel - cause of delay shown to be due to the fault of the Advocate - Legality of rejecting the appeal without fault of the revisionist and delay caused by Advocate s mistake - HELD THAT - Once a local Advocate admits his fault of negligence the assessee should not suffer due to the negligence of a counsel. Since the matter has not been decided on merits it would be in the interest of justice that the same be decided on its own merit. Thus the impugned order passed by the First Appellate Authority as well as the impugned order passed by the Second Appellate Authority i.e. the Commercial Tax Tribunal in all the revisions cannot be sustained in the eyes of law. The same are hereby set aside. Accordingly all the revisions are allowed subject to payment of cost of Rs. 5, 000/- on each revision by the revisionist which shall be deposited before the Assessing Authority concerned within a period of two weeks from today. The First Appellate Authority is directed to decide the issue on its own merits.

1. ISSUES PRESENTED and CONSIDERED

The Court considered the following core legal questions:

(A) Whether the Commercial Tax Tribunal and the authorities below were legally justified in rejecting the revisionist's appeal without any fault or mistake on the part of the revisionist;

(B) Whether the Tribunal was justified in rejecting the appeal when the delay in filing was due to the mistake of the revisionist's Advocate;

(C) Whether the Tribunal was justified in not condoning the delay in filing the appeal before the first appellate authority in light of precedents including Ajanta Arts Vs. CST and S/s Tulsyan Coal Company Vs. CCT.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (A) & (B): Legality of rejecting the appeal without fault of the revisionist and delay caused by Advocate's mistake

Relevant legal framework and precedents: The Court referred to section 9(4) of the U.P. Entry Tax Act, section 9(2) of the Central Sales Tax Act, and section 28 of the UP VAT Act governing appeals and delay condonation. The Court relied heavily on precedents including Ajanta Arts Vs. CST (1987 ATJ 112), S/s Tulsyan Coal Company Vs. CCT (STRE No. 465 of 2017), and the Apex Court decision in Rafiq Vs. Munshilal (1981 (2) SCC 788), which establish that an assessee should not be penalized for delay caused by counsel's negligence.

Court's interpretation and reasoning: The Court noted that the revisionist had filed the appeal with delay due to the fault of the Advocate, Shri Keshav Bandhu, who was entrusted with the papers and fee for filing the appeal. The Advocate admitted his negligence in an affidavit, acknowledging that despite having the necessary documents, the appeal was not filed within time. The Court held that the assessee should not suffer due to the Advocate's fault, consistent with the cited precedents.

Key evidence and findings: The affidavit of the Advocate admitting fault was a crucial piece of evidence. The revisionist's submissions that they were misled by the Advocate's assurances were accepted. The Tribunal and first appellate authority had dismissed the appeal without considering this explanation sympathetically.

Application of law to facts: The Court applied the principle that delay caused by an Advocate's negligence should not prejudice the client. Since the Advocate admitted fault, the delay condonation application should have been considered on merits rather than dismissed outright.

Treatment of competing arguments: The State argued that the appeal was dismissed due to laches and lack of proper explanation, and that the Advocate's affidavit was filed only before the High Court and hence not acceptable. The Court rejected this contention, emphasizing that the Advocate's admission was a valid ground to condone delay and that the revisionist should not be penalized for counsel's mistake.

Conclusions: The Court concluded that the impugned orders of the first appellate authority and the Commercial Tax Tribunal rejecting the appeal on delay grounds without considering the Advocate's admitted fault were legally unsustainable.

Issue (C): Condonation of delay in light of judicial precedents

Relevant legal framework and precedents: The Court examined the precedents set in Ajanta Arts Vs. CST and S/s Tulsyan Coal Company Vs. CCT, which emphasize a liberal approach towards condonation of delay, especially when the delay is caused by inadvertence or negligence of counsel.

Court's interpretation and reasoning: The Court reiterated that the principles established in these precedents require courts and tribunals to consider delay condonation applications sympathetically and not to reject appeals on technical grounds when the delay is explained by counsel's fault.

Key evidence and findings: The affidavit of the Advocate and the revisionist's explanation that the delay was not willful but due to counsel's negligence were key factors.

Application of law to facts: The Court applied these principles to the facts, holding that the delay should have been condoned and the appeal decided on merits.

Treatment of competing arguments: The State's reliance on procedural strictness was rejected in favor of the liberal approach mandated by the precedents.

Conclusions: The Court held that the delay in filing the appeal should have been condoned and the appeal allowed to be heard on merits.

3. SIGNIFICANT HOLDINGS

The Court held:

"Once an Advocate admits his fault, the assessee should not suffer in view of the judgement of this Court in Ajanta Arts (supra) as well as the judgement of the Apex Court in Rafiq (supra)."

"Once a local Advocate admits his fault of negligence, the assessee should not suffer due to the negligence of a counsel."

"In view of the aforesaid facts & circumstances of the case as well as the law laid down by the Apex Court as well as this Court in the cases cited above, the impugned order passed by the First Appellate Authority as well as the impugned order passed by the Second Appellate Authority, i.e., the Commercial Tax Tribunal, in all the revisions cannot be sustained in the eyes of law. The same are hereby set aside."

The Court established the core principle that delay caused by an Advocate's negligence should not prejudice the client, and that appeals should be heard on merits when delay is satisfactorily explained by counsel's fault.

The Court directed the first appellate authority to decide the appeal on merits after condoning the delay, subject to payment of costs by the revisionist.

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