By TIOL News Service

AHMEDABAD, MAY 11, 2018: THE ISSUE BEFORE THE BENCH IN THIS CASE IS - Whether a delay of about 444 days by the Value Added Tax department in filing appeal against a Tribunal order, is condonable, where it is seen that such delay is caused due to the office of the Government Pleader misplacing relevant documents without which the appeal could not have been drafted and filed in time. YES IS THE ANSWER.

Facts of the case

The assessee company is a leading entity engaged in the processing and distribution of natural gas in India. During assessment for the relevant AY, the assessee claimed deduction of the discount granted by it to its oil marketing company on turnover sales. While the Assessing Authority initially denied such deduction, the same was allowed to the assessee by the Tribunal, on subsequent appeal. Hence, the present appeal by the Department was filed, also seeking to condone a 444-day delay in filing such appeal.

On hearing the matter, the High Court held that,

++ it can be seen that the reasons cited for preferring the appeal after delay mainly raised on two grounds. First is that the administrative clearances and decisions take sometime. It is pointed out that the judgement of the Tribunal dated 24.02.2016 was received on 28.03.2016. After receiving opinion from the concerned authorities, the Commissioner, Commercial Tax Department, sent a proposal to the Government for filing appeal on 30.05.2016. Queries in this respect were made and replied by the Commercial Tax Department. Ultimately, approval was received from the Government on 05.07.2016. Necessary documents were supplied to the office of the Government Pleader on 13.07.2016 with instructions to file tax appeal. However, such papers were misplaced in the office of the Government Pleader. This was brought to the notice of the Officer of the Government Pleader upon which, immediately the officers were contacted in March 2017. In response to this, second set of papers were handed over to the Government Pleader's office on 29.06.2017. The Tax Appeal was drafted and forwarded to the VAT Department on 12.07.2017. After receiving from the VAT Department, it was filed in the High Court on 09.08.2017;

++ thus the delay is properly explained. It is true that there was a clear error on part of the Government Pleader's Office in not taking prompt steps for drafting and filing the Tax Appeal. However, Government Pleader's Office owned up this mistake. It is stated that after receiving the papers on 13.07.2016, the same were misplaced. When this came to light, the VAT Department was contacted in March 2017 for supplying second set of papers. Government Pleader's office received such papers on 29.06.2017. Tax Appeal was drafted and sent to VAT Department on 12.07.2017 and the appeal was filed on 09.08.2017.

++ this is therefore not a case where long stretch of delay had remained totally unexplained. Considering the explanation rendered for the delay caused in filing appeal and the tax implications involved, we are inclined to condone the delay. Of course, upon the cost being paid to the assessee. Not condoning the delay would amount to terminating an issue involving sizeable tax implications without the High Court considering the same on merits. Hence, considering the decisions in various applicable precedent cases, delay is condoned however, on the condition that the applicant shall pay cost of Rs. 25,000/- to the assessee latest by 30.04.2018.

(See 2018-TIOL-882-HC-AHM-VAT)