PKL Limited Vs Joint Commissioner (Kerala High Court)
The Kerala High Court considered writ petitions filed by PKL Limited challenging rejection of its appeals concerning assessment years 2010-11, 2011-12 and 2012-13 under the Kerala Value Added Tax Act. The appeals had been rejected by the First Appellate Authority on the grounds that they were filed with delay and were not accompanied by applications for condonation of delay or payment of the legal benefit fund.
The petitioner, a registered dealer under the KVAT Act, had originally faced assessments under Section 25, resulting in assessment orders dated 31.03.2016. Those orders were challenged before the High Court and were set aside by judgment dated 22.02.2017, with directions to reconsider the matter. Fresh assessment orders were subsequently passed on 16.03.2019, 15.03.2019 and 26.03.2019 for the respective assessment years.
On 29.09.2023, the petitioner filed appeals invoking the special provision under the Kerala Finance Act, 2023, which permitted assessees under the KVAT Act to file fresh appeals up to 30.09.2023 even where the normal appeal period had expired. However, due to a mistake, the petitioner attached and referred to the original assessment orders dated 31.03.2016, which had already been set aside. The petitioner subsequently withdrew those appeals and filed fresh appeals against the revised assessment orders.
The petitioner believed that the fresh appeals were a continuation of the earlier appeals and therefore did not file delay condonation applications. It also did not pay the legal benefit fund again, stating that the amount had already been paid with the earlier appeals. The First Appellate Authority nevertheless rejected the fresh appeals. Although the petitioner later submitted delay condonation applications, they were not considered because the appeals had already been dismissed.
The High Court held that the Appellate Authority was justified in finding that there was delay. The fresh appeals could not legally be treated as a continuation of the withdrawn appeals because the earlier appeals had been filed against assessment orders that were no longer in force. Further, the orders permitting withdrawal of the earlier appeals did not specifically seek or grant liberty to file fresh appeals. Accordingly, limitation continued to run from service of the fresh assessment orders, making a delay condonation application necessary.
However, the Court found that the petitioner had proceeded without seeking condonation due to a bona fide misconception, apparently arising from wrong advice. Since the petitioner had not received an opportunity to have its appeals considered on merits, the Court considered it appropriate, in the interest of justice, to provide a further opportunity to seek condonation of the delay. The petitioner was permitted to rely on the proceedings pursued in the earlier appeals while explaining the delay.
Regarding the legal benefit fund, the Court found no impropriety in the First Appellate Authority’s rejection on that ground. Nevertheless, in view of the opportunity being granted to pursue the appeals, the petitioner was permitted to pay the legal benefit fund again for all three appeals.
The High Court consequently quashed the rejection orders. The petitioner was directed to submit applications for condonation of delay along with affidavits explaining the delay from the dates of receipt of the fresh assessment orders until the filing of the appeals, within three weeks from receipt of the judgment. The First Appellate Authority was directed to restore the appeals, consider the delay condonation applications first, and thereafter pass appropriate orders in accordance with law after providing the petitioner an opportunity of being heard.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
All these cases are filed by a company, being aggrieved by the rejection of the appeals submitted by the petitioner against the assessment orders pertaining to the year 2010-11, 2011-12, 2012-13. The appeals were rejected on the reason that, the petitioner failed to submit applications to condone the delay, whereas according to the First Appellate Authority, the appeals were submitted after more than five years.
2. The fact that led to the filing of these writ petitions are as follows:-
The petitioner was a registered dealer under the provisions of the Kerala Value Added Tax Act. Pertaining the assessment years referred to above, the petitioner submitted the returns, but, the proceedings were initiated under Section 25 of the Kerala Value Added Tax Act and ultimately, it resulted in assessment orders dated 31.03.2016. The petitioner challenged the said assessment orders before this Court, by filing W.P(C) No.36945/2016 and as per judgment dated 22.02.2017 all the said assessment orders were set aside by this Court by directing the assessing authority to reconsider the matter.
3. Based on the said judgment, fresh assessment orders were passed in respect of the assessment years 2010-11, 2011-12 and 2012-13 on 16.03.2019, 15.03.2019 and 26.03.2019 respectively. The petitioner, with the intention to challenge the revised orders, filed three appeals against the same before the First Appellate Authority on 29.09.2023. According to the petitioner, the said appeals were submitted by invoking the special provision contemplated under the Kerala Finance Act, 2023 where the assessees under the KVAT Act, were permitted to file fresh appeals before the appellate authority on or before 30.09.2023, even though the actual period for filing the appeal expired. Thus, the aforesaid appeals were filed without any delay in terms of the Kerala Finance Act, 2023. However, while submitting the aforesaid appeals, by mistake, the assessment orders attached along with the said appeals and the numbers referred to were that of the original assessment orders dated 31.03.2016, which were already set aside by the High Court in W.P(C) No.36945/2016.
4. According to the petitioner, it was only by way of a mistake the said assessment orders happened to be challenged, whereas, the actual intention of the petitioner was to challenge the revised assessment orders passed based on the directions issued by this Court. Upon realizing the mistake, the appeals were withdrawn by the petitioner and the orders allowing such withdrawal are produced as Ext.P3 in all these writ petitions. Subsequently, the petitioner submitted fresh appeals as evidenced by Ext.P4, before the First Appellate Authority. According to the petitioner, the impression the petitioner could gather from the facts and circumstances was that, there was no delay in submitting the fresh appeals, as the appeals filed against the fresh assessment orders, were the continuation of the appeals, which were disposed of as per Ext.P3 orders. Such an impression was in view of the fact that, in the appeals which culminated in Ext.P3 orders, the intention of the petitioner was to challenge the fresh assessment orders, but, by mistake, the assessment orders referred to and attached with the said appeals, were the original assessment orders, which were interfered with by this Court in the writ petition. Therefore, since the petitioner was under that impression, no delay condonation application was submitted.
5. Similarly, as the petitioner had withdrawn the earlier appeals, only for the purpose of filing fresh appeals along with the fresh assessment orders issued after the interference of this Court in the writ petition, the legal benefit fund also was not paid. This was in view of the fact that, the legal benefit fund in respect of the assessment orders were already paid by the petitioner in the earlier appeals submitted.
6. However, the Appellate Authority rejected all the said appeals as per the orders produced as Ext.P8 in these writ petitions on two reasons. Firstly, the petitioner failed to submit any delay condonation application and the secondly, the petitioner did not pay the legal benefit fund. Although, subsequently the petitioner submitted Ext.P9 delay condonation applications, the same were not entertained as the appeals themselves were dismissed by that time. It was in these circumstances the petitioner has approached seeking the following reliefs:
“i) To call for the entire records leading to pass Exbt-P8 rejection order by the 1st respondent and quash the same by issuing a writ in nature of certiorari or any other appropriate writ, order or direction;
(ii) To issue an order in the nature of mandamus directing the 1st respondent to dispose of Exbt-P4 appeal within a time limit to be fixed by this Hon’ble Court on merit in the interest of equity and justice;
(iii) To issue an order in the nature of mandamus directing the 1st respondent to accept maximum court fee already paid towards KLBF, admit the same, dispose Exbt-P4 appeal and pass orders on it on merits after affording an opportunity of being heard to the petitioner;
(iv) To issue an order condoning 278 days delay in filing the appeal and direct 1st respondent to dispose Exbt-P4 appeal;
AND
(v) To pass such other orders as this Hon’ble Court deems justified in the facts and circumstances of the case;”
7. A detailed counter affidavit is submitted by the 2nd respondent denying the averments contained in the writ petition and opposing the reliefs sought in the writ petition. It was pointed out that, under no circumstances the stand taken by the petitioner that there was no delay in filing the appeals could be accepted, as the appeals submitted against the fresh assessment orders cannot be treated as continuation of the earlier appeals. Therefore, dismissal of the writ petitions was sought.
8. I have heard learned Counsel for the petitioner and the learned Government Pleader for the respondents.
9. After carefully going through the records, I find that the findings entered into by the Appellate Authority that there was delay in submitting the appeals cannot be said to be illegal. However, the facts and circumstances that culminated in Ext.P3 orders clearly indicate that, at the time the appeals were filed, the assessment orders impugned therein were not in force. It is to be noted that those appeals were submitted on 29.09.2023, whereas, the judgment setting aside the assessment orders impugned in those appeals were in fact passed by this Court on 22.02.2017. Thus, the only assessment orders which were in existence as on the said date were the fresh assessment orders passed by the assessing authority based on the judgment rendered by this Court on 22.02.2017 in petitioner that, it intended to challenge fresh assessment orders but while submitting the appeal, original assessment orders which were not in existence at the relevant time were attached with the said appeals, is probable. Immediately, on realizing the mistake, those appeals were withdrawn as evidenced by Ext.P3 orders. The present appeals which resulted in Ext.P8 orders were submitted subsequently, attaching fresh assessment orders issued in the dates referred to above. Even though such appeals were withdrawn and the fresh appeals were submitted against the fresh assessment orders, as contended by the learned Government Pleader, under no circumstances, the appeal submitted with fresh assessment orders can be treated as continuation of the earlier appeals.
10. Moreover, although it was contended that the filing of the appeals against the original assessment orders was a mistake, a perusal of the observations in Ext.P3 order, by which those appeals were permitted to be withdrawn, shows that no liberty to file fresh appeal was either specifically sought or granted. Therefore, the period of limitation which commenced upon service of notice of the fresh assessment orders on 16.03.2019, 15.03.2019 and 26.03.2019 would continue without any interruption and therefore, it was obligatory for the petitioner to submit a delay condonation petition along with an affidavit explaining the reasons for the delay, which has to be reckoned from the date of receipt of service of the fresh assessment orders. Thus, the contention taken by the petitioner while pursuing the appeal without submitting the delay condonation application was not at all correct. At the most, the petitioner could have highlighted the fact that, the petitioner had mistakenly pursued the earlier appeal by producing the original assessment orders, as a reason for the delay that occurred in filing the subsequent appeal. Thus, I find that the order passed by the First Appellate Authority to that extent is justifiable.
11. However, even while arriving at the said conclusion, it is evident that, it was due to a misconception of the petitioner that the petitioner availed the statutory remedy of appeal without submitting a delay petition. Apparently, it was because of a wrong advice that no delay petition was required, the petitioner pursued appeal which ultimately resulted in Ext.P8 orders. It is also a fact that the petitioner did not get an opportunity to get the contentions raised by the petitioner considered on merits, as the appeal was dismissed only because of the reason that the same was not accompanied with a delay condonation application. Therefore, since it was only on account of a bona fide mistake as is discernible from the records, I am of the view that, in the interest of justice, the petitioner can be granted a further opportunity to contest the appeal, by submitting an application for condoning the delay for the period from the date of receipt of the impugned fresh assessment orders till the date of filing the appeal.
12. When it comes to the case of question of non payment of the legal benefit fund, I do not find any impropriety on the part of the First Appellate Authority in rejecting the appeal on that ground. Since, I have already found that the petitioner was under mistaken impression and also decided to grant an opportunity to the petitioner for pursuing the appeal, I am of the view that the petitioner can be permitted to pay the legal benefit fund once again, for all the three appeals.
In such circumstances, these writ petitions are disposed of quashing Ext.P8 orders with a direction to the petitioner to submit the applications to condone the delay along with the affidavit explaining the reasons for the delay, in the above appeals. Needless to say, the petitioner will have to explain the delay from the date of receipt of the fresh assessment orders till the date of filing of the appeals. However, the petitioner shall be at liberty to rely upon the proceedings pursued in the earlier round of appeals as an explanation for the delay. Such an affidavit along with an application shall be submitted before the first appellate authority within a period of three weeks from the date of receipt of a copy of this judgment and thereupon the first appellate authority shall restore the appeals and consider delay condonation first and there after appropriate orders thereon shall be passed in accordance with law after giving the petitioner an opportunity for being heard.
