Case Law Details
Sanyo Koreatex Pvt. Ltd. Vs Deputy Commissioner (Allahabad High Court)
Introduction: The Allahabad High Court recently delivered a significant judgment in the case of Sanyo Koreatex Pvt. Ltd. vs Deputy Commissioner, addressing the applicability of Section 5 of the Limitation Act, 1963, to the rectification of orders under Section 31 of the Uttar Pradesh Value Added Tax Act, 2008 (UP VAT Act). This judgment holds importance for entities seeking rectification of taxation orders that may have been missed due to reasons beyond their control.
Detailed Analysis: Sanyo Koreatex Pvt. Ltd. filed a writ petition against the decision of the Commercial Tax Tribunal, which refused to entertain the petitioner’s application for rectification of a typographical error in an order dated March 18, 2017. The tribunal had deemed the application time-barred. The petitioner argued that it was unaware of the original order until its bank account was attached on September 14, 2021, highlighting a critical typographical error impacting the tax figure.
The crux of the petitioner’s argument revolved around the non-application of Section 5 of the Limitation Act to Section 31 of the UP VAT Act, which deals with rectification of orders. The petitioner contended that the absence of a specific bar to extending the prescribed time limit under Section 31 implies that Section 5 of the Limitation Act should apply, allowing for the extension based on a sufficient cause for delay.
The Allahabad High Court’s decision to allow the petition, quashing the order dated April 6, 2022, by the Commercial Tax Tribunal, underscores a vital legal principle. The Court observed that the extension of limitation periods by the Supreme Court, up to February 28, 2022, and the circumstances under which the petitioner learned about the original order warranted the application of Section 5 of the Limitation Act. This application permits condoning the delay in filing the rectification application, emphasizing a flexible and just approach to technicalities related to limitation periods in the context of taxation statutes.
Conclusion: The Allahabad High Court’s ruling in Sanyo Koreatex Pvt. Ltd. vs Deputy Commissioner marks a significant precedent in the context of taxation law and the application of the Limitation Act. By recognizing the applicability of Section 5 to Section 31 of the UP VAT Act for extending the time for filing rectification applications, the Court has provided a lifeline to entities facing challenges due to unawareness or procedural delays. This judgment not only facilitates a more equitable treatment of taxation disputes but also underscores the importance of justice over procedural technicalities.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. This is a writ petition under Article 226 of the Constitution of India, wherein the petitioner is aggrieved by the order dated April 6, 2022 passed by the Commercial Tax Tribunal refusing to entertain the rectification application of the petitioner on the ground that the same was time barred.
2. Counsel appearing on behalf of the petitioner submits that the original order was passed by the Commercial Tax Tribunal (hereinafter referred to as the “Tribunal”) on March 18, 2017, however the petitioner was not made aware of the said order. He submits that the petitioner came to know about the said order only on September 14, 2021 when its bank account was attached. He further submits that there was a typographical error in the order passed by the Tribunal on March 18, 2017 wherein the figure should have been Rs.34,04,333/- but by mistake, the order contained the figure Rs.30,04,333/-. He submits that this typographical error is without any fault of the petitioner and it should not be penalised for the same. He submits that there is no expressed or implicit bar of application of Section 5 of the Limitation Act, 1963 (hereinafter referred to as the “Limitation Act”) to Section 31 of the Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as the “VAT Act”), as there is no provision for extension of the time period of three years provided in Clause (1) of Section 31 of the VAT Act. He submits that in statutory provision of taxation statutes when there is no provision for extension of time period for showing sufficient cause, Section 5 of the Limitation Act would apply. The application of Section 5 of the Limitation Act would not be barred in such a case wherein no time period is given for extension.
3. I have heard Sri Shambhu Chopra, learned Senior Advocate assisted by Mahima Jaiswal, learned counsel for the petitioner and Sri Arvind Mishra, learned Standing Counsel for the State.
4. It is to be noted that the Supreme Court in Misc. Application No.21 of 2022 filed in Suo Motu Writ Petition (C) No.3 of 2020 (In Re: Cognizance for Extension of Limitation) allowed the limitation to be extended till February 28, 2022. The petitioner, in the present case, has filed the application on March 11, 2022, that is, only 11 days after the end of the above period. Furthermore, petitioner’s case is that it was not made aware of the order dated March 18, 2017 and it came to know about the said order only on September 14, 2021 when its bank account was attached.
5. Without going into hyper technicality with regard to period of limitation, this Court keeping in mind the Supreme Court judgment for extension of period of limitation and the fact that Section 5 of the Limitation Act would apply to Section 31 of the VAT Act is of the view that the delay in filing the rectification application should be condoned. In light of the same, the order dated April 6, 2022 passed by the Tribunal is quashed and set aside with a direction upon the Tribunal to hear the rectification application of the petitioner on merit and decide the same within four months from date.
6. With the above direction, the writ petition is allowed.
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