M/S. J Soundari vs. The Deputy Commercial Tax Officer

Facts

The petitioner, M/s. J Soundari, filed a writ petition challenging an assessment order and a subsequent order rejecting their application for rectification, as well as an order from the Appellate Deputy Commissioner. The petitioner's appeal against the original assessment order was rejected by the appellate authority due to a delay of 392 days. The petitioner had paid 10% of the disputed tax amount while filing the appeal. The original assessment order was passed ex parte. The petitioner sought to quash the orders and requested a fresh order after a personal hearing.

Held

The Court acknowledged that while it could interfere in cases of marginal delay under Article 226, the delay of 392 days was substantial, preventing a direction to the appellate authority to number the appeal and decide on merits. However, at the petitioner's counsel's request to mould the prayer, the Court set aside the ex parte assessment order on a conditional basis. The condition is that the petitioner must remit an additional 15% of the disputed tax amount within thirty days and thereafter reply to the show cause notice within another thirty days. Upon compliance, the attachment on the petitioner's ITC account will be raised, and the second respondent will provide a personal hearing before passing a final order within two months. Failure to comply will result in the recall of this order and enforcement of the impugned orders. The ratio is that substantial delay in appeal can be overcome by imposing strict conditions for a fresh opportunity to address the merits, especially when the original assessment was ex parte.

Key Issues

1. Whether the High Court should interfere under Article 226 of the Constitution of India when the delay in filing the appeal before the appellate authority is substantial (392 days)? Petitioner's contention: The petitioner sought to quash the impugned orders and requested a fresh order after affording an opportunity of personal hearing, implying a challenge to the rejection of the appeal on limitation grounds and a desire to address the merits of the original assessment. Respondents' contention: The respondents, represented by the Additional Government Pleader, did not explicitly record arguments but implicitly supported the orders passed by the authorities, particularly the rejection of the appeal on limitation.