M/S A John Edward vs. The Deputy Commercial Tax Officer

Facts

The petitioner, M/s A John Edward, filed a writ petition challenging an order from the Deputy Commercial Tax Officer (1st respondent) and a subsequent order from the Appellate Deputy Commissioner (CT) (2nd respondent). The petitioner's appeal before the 2nd respondent was rejected due to being filed beyond the condonable period, with a delay of 392 days. The petitioner had initially challenged the assessment order and the rejection of their application for rectification. The assessment order was passed ex parte. The petitioner had already paid 10% of the disputed tax amount while filing the appeal.

Held

The Court acknowledged that it would typically not interfere under Article 226 for a delay of 392 days in filing an appeal. However, at the petitioner's request to mould the prayer, the Court decided to set aside the ex parte assessment order. This was conditioned upon the petitioner depositing an additional 15% of the disputed tax amount within thirty days. Upon compliance, the attachment on the petitioner's ITC account would be raised. The petitioner would then have thirty days to reply to the show cause notice. The 2nd respondent was directed to provide a personal hearing and pass a final order within two months. Failure to comply would result in the recall of the benefit of this order and enforcement of the original impugned order. The ratio is that substantial compliance with tax obligations and a willingness to participate in proceedings can lead to a second chance even after significant procedural delays, provided the Court exercises its equitable jurisdiction.

Key Issues

1. Whether the High Court should interfere under Article 226 of the Constitution of India when the delay in filing an appeal before the appellate authority is substantial (392 days)? 2. Whether the original assessment order, passed ex parte, should be set aside, and the matter remanded for fresh consideration? Petitioner's arguments: The petitioner sought to quash the orders as cryptic, nonspeaking, illegal, arbitrary, and without jurisdiction. They prayed for a fresh order from the 2nd respondent after affording a personal hearing, as contemplated under Section 75(4) of the TNGST Act, 2017. At a later stage, the petitioner sought to mould the prayer to challenge the original assessment order. Revenue's arguments: The judgment records no specific arguments from the respondents regarding the delay or the merits of the assessment order. However, the respondents were represented, and the court heard both sides.