M/S Laxmi Overseas Through Its Proprietor Kirti Prajapati vs. The Commissioner

Held

The Court held that the Appellate Authority had not sufficiently considered the sufficiency of the cause for the delay in filing the appeal. It was observed that procedures are meant to aid justice, not to obstruct it. The Court found that the petitioner's valuable right to have their appeal heard on merits should not be denied without a proper consideration of the delay. Consequently, the impugned order dated May 28, 2024, passed by the Appellate Authority was set aside. The matter was remanded back to the Appellate Authority for reconsideration on merits, with a direction for the petitioner to deposit a cost of Rs. 10,000/- with the Department before the appeal is heard on merits. The Court explicitly stated that it had not expressed any opinion on the merits of the case.

Facts

The petitioner, M/s Laxmi Overseas, challenged two orders: one dated July 8, 2022, passed by the Deputy Commissioner, State Tax Anti Evasion Bureau (Respondent No. 3), which raised a demand of Rs. 5,26,684/-, and another dated May 28, 2024, passed by the Appellate Authority (Respondent No. 2). The petitioner filed an appeal against the initial order but it was rejected by the Appellate Authority on the grounds of limitation, with a delay of 92 days. The petitioner contended that the delay was caused due to the non-communication of the impugned order within the stipulated period, leading to a bona fide belief that the appeal was filed within time. The petitioner sought quashing of the impugned orders, a direction for refund of tax and penalty paid, and alternatively, condonation of delay and remand of the case to the appellate authority.

Key Issues

1. Whether the Appellate Authority erred in rejecting the petitioner's appeal solely on the ground of limitation, without adequately considering the reasons for the delay, thereby violating principles of natural justice and the maxim that procedures are handmaids to justice? Petitioner's arguments: The petitioner argued that the delay of 92 days in filing the appeal was unintentional and caused by the non-receipt of the impugned order within the stipulated period. They claimed to have acted under a bona fide impression that the appeal was within time and were willing to pay costs for a hearing on merits. They relied on the principle that procedures should not be masters of justice. Revenue/State's arguments: The respondents/State contended that it was the petitioner's duty to file the appeal within the prescribed period and that the Appellate Authority had rightly dismissed the appeal on grounds of limitation.