First Reality vs Additional Commissioner of Commercial Taxes

V.G. Sabhahit, J.—This appeal is filed by the assessee being aggrieved by the order dated January 15, 2009, passed by the Assistant Commissioner of Commercial Taxes, Bangalore, wherein the revision initiated u/s 64(1) of the Karnataka Value Added Tax Act, 2003 (hereinafter called "the Act") is concluded by setting aside the order passed in appeals by the appellate authority and order passed by the Joint Commissioner in favour of the investigating officer which demands interest. The material facts leading to the filing of this appeal are as follows:

The appellant is a dealer registered under the Act and engaged in execution of works contract. The business premises of the appellant were visited by the Assistant Commissioner of Commercial Taxes, Investigation II, for verification of books of accounts on January 5, 2007. At the time of physical verification, Sri Nagaraj, person in-charge, was present and assisted the entire proceedings. On the basis of the information gathered during the said visit, notice was issued u/s 38(5) of the Act dated October 8, 2006, informing the company to appear and thereafter by virtue of the power vested under sections 52(1)(i) and 38(5) of the Act, the tax proposed u/s 38(5) of the Act was confirmed for various tax periods as monthly sale proceeds, AMC were not furnished based on the ratio and proportion in pursuance of the common preamble. Being aggrieved by the said order dated January 19, 2007, the appellants were before the Additional Commissioner of Commercial Taxes. There was delay of 277 days in filing the appeal and on the application filed for condoning the delay of 67 days, the same was condoned by the appellate authority and the appellate authority modified the order passed by the original authority. Thereafter, a show-cause notice was issued by the revisional authority in exercise of the power u/s 64(1) of the Act and served upon the appellant as to why the order of the appellate authority condoning the delay in filing the appeal which illegal and deciding the appeal on merits, when delay could not be condoned, should not be set aside. Reply was filed by the appellant herein contending, the delay has been properly condoned and the order of the appellate authority is justified. Therefore, no ground is made out for exercise of revisional jurisdiction u/s 64 of the Act. The revisional authority by order dated January 15, 2009 held that in view of the provisions of section 62 of the Act, the appeal has to be filed within 30 days from the date of notice of assessment was served on the appellant and delay to the extent of 180 days, thereafter can be condoned u/s 62(2B) of the Act. The appellate authority has been given power to condone the delay for a period 180 days after the expiry of 30 days as referred to in sub-section (2) of section 62. In the present appeal there was 67 days delay and the order passed by the appellate authority was illegal and liable to be set aside and the order passed on the merits in the appeal could not have been entertained, as delay has caused loss to the Revenue and accordingly set aside the order passed by the appellate authority and restored the order passed by the investigation authority. Being aggrieved by the said order dated January 19, 2007, this appeal is filed.

We have heard the learned counsel appearing for the appellant and learned Government Advocate appearing for the respondent.

The learned counsel for the appellant submitted that delay has been properly condoned by the appellate authority since notice had not been served upon the appellant and on the other hand, having accepted the explanation offered by the appellant, delay has been condoned by holding that the service of notice on the appellant was not proper. Therefore, order of condoning the delay is justified. The revisional authority could not have set aside the order of the appellate authority condoning the delay and even on the merit, as no loss of revenue is caused. Therefore, the order of the revisional authority is liable to be set aside.

Learned Government Advocate submits that in view of the provisions of section 62 of the Act, appeal has to be filed within 30 days from the date of service and delay of 180 days can be condoned. Therefore, the appeal filed by the appellant herein which was 277 days after service of notice of the person who was authorised to receive notice on behalf of the appellant, the appellate authority had no jurisdiction to condone the delay of 67 days in filing the appeal. Therefore, the order passed by the revisional authority setting aside the order passed in appeal and upholding the order of the investigating authority, is justified. We have carefully considered the contention of learned counsel for the parties and scrutinized the materials on record and the material on record would clearly show that there is no dispute that there was delay of 277 days in filing the appeal, as the appeal should have been filed within 30 days from the date of service of notice and that delay up to 180 days would not have been condoned by the appellate authority and the finding of the appellate authority that the notice was served upon Nagaraj and not on the appellant, is only erroneous. As it is clear that it was Nagaraj who represented the appellant before the original authority and it is not open for him to contend that Nagaraj had not been authorised to receive notice on his behalf and himself had authorized Nagaraj to represent before the authorities. In view of the delay beyond the period of 180 days after prescribed period of 30 days for filing appeal would not have been condoned by the appellate authority and the same is illegal and once the entertainment of appeal by the appellate authority by condoning the delay is held to be illegal, ought to have dismissed the appeal. Order passed in appeal cannot be sustained, though revisional authority has gone into the merits of the case, it was unnecessary to go into the merits of the case when it was held that the appellate authority had no jurisdiction to condone the delay. The appeal was liable to be dismissed on the ground of limitation itself and that the appellant would not be caused any prejudice in further proceedings. Findings given on the merits and the order passed by the appellate authority are set aside on the ground that the delay could not have been condoned. Accordingly, the appeal is devoid of merit and the order passed by the appellate authority is held to be illegal and the order issued by the investigating authority would stand revived. The appeal is liable to be dismissed as barred by time and accordingly, we do not find any error of irregularity in the order passed by the revisional authority. The appeal is devoid of merit and accordingly, we pass the following:

ORDER

Appeal dismissed.