M/S National Security And Allied Services vs. State Of Karnataka

Held

The Court held that the Appellate Authority (R-3) failed to consider crucial assertions made by the petitioner regarding the non-receipt of the demand order dated 10.12.2018 until 28.05.2019 and the petitioner's subsequent partial payment on 05.02.2019 after being informed by its banker about a garnishee notice. The Court found that if 05.02.2019 were considered the date of communication, the appeal would have been within the prescribed time limit. The Court reasoned that these circumstances warranted the Appellate Authority's attention, and the mention of 10.12.2018 as the communication date in the appeal format should have been considered in light of the petitioner's explanation. The Court concluded that the Appellate Authority's order, Annexure-E, rendered without considering these facts, could not stand legal scrutiny, especially as it denied the petitioner's right of appeal. The Court set aside the Appellate Authority's order and restored the appeal for reconsideration, allowing the petitioner to urge all grounds. The Court expressly left undecided the merits of the original demand order.

Facts

The petitioner, M/s National Security & Allied Services, filed a writ petition challenging a demand order dated 10.12.2018 passed by the Assistant Commissioner of Commercial Taxes (R-2) and the subsequent rejection of its appeal by the Joint Commissioner of Commercial Taxes (Appeals)-6 (R-3) on 02.12.2019. The appeal was rejected on the grounds of being belated by four months, exceeding the time limit prescribed under Section 107 of the Act. The petitioner contended that it was not served with a physical copy of the demand order until 28.05.2019 and only became aware of it when its banker informed it about a garnishee notice dated 30.01.2019. The petitioner had paid a part of the demand on 05.02.2019, but was still unaware of the assessment order's details at that time.

Key Issues

1. Whether the Appellate Authority (R-3) erred in rejecting the petitioner's appeal as belated, considering the petitioner's claim of not receiving the demand order dated 10.12.2018 until 28.05.2019, and only learning of it through a garnishee notice dated 30.01.2019, with a partial payment made on 05.02.2019? (Question of mixed law and fact, turning on Section 107 of the Act). Petitioner's Arguments: - The Appellate Authority failed to consider that the petitioner was not served with the physical copy of the order dated 10.12.2018 until 28.05.2019, and the appeal was filed immediately thereafter. - The petitioner learned of the order via a garnishee notice dated 30.01.2019, and bonafide paid a part of the demand on 05.02.2019, without full knowledge of the assessment order's details. - The date of communication should be considered 28.05.2019 or at least 05.02.2019, which would render the appeal in time. - The Appellate Authority's failure to consider these circumstances resulted in a miscarriage of justice. Respondents' Arguments: - The revenue relied on the appeal memorandum filed by the petitioner, which allegedly admitted that the order dated 10.12.2018 was communicated on the same day, thus justifying the Appellate Authority's order dismissing the appeal on limitation grounds.