M/S Kaydee Audio Vision PVT. LTD. vs. State Of U.P. And 3 Others

Held

The Court held that no party should be prejudiced by an act of the Court. While the Supreme Court had set aside High Court orders, its intention was not to take away the right of appeal. The petitioner, by filing a writ petition, had lost their right of appeal due to the rigid limitation period. The Court noted that the State authorities had not fully apprised the Supreme Court of this consequence. Recognizing the unique circumstances and the potential prejudice to the assessee, the Court inquired if the State would waive the limitation objection. The Chief Standing Counsel for the State fairly stated that due to the unique circumstances, the State would not raise any objection to limitation if appeals were filed within a reasonable time. Consequently, the appellate order dated 22.11.2021 was set aside, and the matter was remitted to the appellate authority to decide the appeal afresh on merits without raising any objection as to limitation. The Court also directed fresh notices to be issued to other affected assessees, providing them an opportunity to file appeals within ninety days of receiving the communication.

Facts

The petitioner, M/s Kaydee Audio Vision Pvt. Ltd., challenged orders passed under Sections 129(3) and 130 of the U.P. GST Act, 2017. An initial order dated 09.02.2018 imposed tax and penalty of Rs. 5,35,335/- on imported goods. The petitioner had filed a writ petition (Writ Tax No. 215 of 2018) challenging this, arguing e-way bills were not mandatory in UP at the time. This court granted interim relief, releasing the goods upon security deposit. Subsequently, the petitioner's case was disposed of, to abide by a Division Bench decision in M/s Godrej & Boyce Manufacturing Co. Ltd. vs. State of U.P. & Ors. However, the Supreme Court, in State of U.P. & Ors. vs. M/s Kay Pan Fragrance Pvt. Ltd., set aside all High Court orders listed in the State's compliance affidavit, including the petitioner's, and directed fresh processing of claims. Following this, a notice under Section 130 was issued on 07.12.2019. The petitioner's appeal against the original order dated 09.02.2018 was dismissed as time-barred on 22.11.2021.

Key Issues

1. Whether the petitioner's appeal, dismissed as time-barred, should be decided on merits despite the Supreme Court's order in M/s Kay Pan Fragrance Pvt. Ltd. and the petitioner's prior writ petition leading to the loss of appeal remedy? The petitioner argued that they were prejudiced by the court's orders and the subsequent Supreme Court order, which set aside High Court orders without them being heard. They contended that no party should be prejudiced by an act of the court and that the Supreme Court's intention was not to render assessees remediless. They relied on the principle that courts should not cause prejudice to parties. The respondent (State) initially did not raise objections to the petitioner's appeal being time-barred, acknowledging the unique circumstances and stating they would not object to limitation if appeals were filed within a reasonable time.