Indian Oil Corporation Ltd. vs State of Haryana and Others

Ajay Kumar Mittal, J.—This appeal has been filed by the assessee under section 36 of the Haryana Value Added Tax Act, 2003 (in short, "the Act") against the order dated July 31, 2013 (annexure A4) passed by the Haryana Tax Tribunal, Chandigarh (hereinafter referred to as "the Tribunal") in STA No. 246 of 2008-09, claiming the following substantial question of law:

"Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in not condoning the delay of 155 days wherein there exists sufficient cause for the same?"

The facts necessary for adjudication of the present appeal as narrated therein are that the appellant-Indian Oil Corporation (IOC) is a Government of India undertaking engaged in the sale and purchase of petroleum products. In the year 2007, a merger had taken place between the IBP and IOC Limited. Earlier, the IBP was registered as a separate dealer with the assessing authority, Ambala and the present appeal is being filed by the appellant as the IBP had become a part of the appellant. The assessment in this case was framed by the assessing authority vide order dated March 20, 2007 (annexure A1) calculating an excess amount of Rs. 2,42,037 which was carried forward to the next year. Thereafter, the appellant received a notice under section 34 of the Act for initiating revisional proceedings on the ground that the assessing authority had wrongly allowed a concessional rate of tax at four per cent on the sale to industrial units and the stock transfer had not been allowed properly. The appellant submitted reply to the said notice. The revisional authority dropped the notice on the second issue and revised the assessment on the first issue vide order dated July 30, 2011 (annexure A2). Feeling aggrieved, the appellant filed an appeal (annexure A3) along with application for condonation of delay of 155 days before the Tribunal. The Tribunal vide order dated July 31, 2013 (annexure A4) dismissed the appeal being barred by limitation. Hence, the present appeal.

We have heard learned counsel for the parties.

The primary question that arises for consideration in this appeal is whether the delay of 155 days in filing the appeal before the Tribunal was liable to be condoned in the facts and circumstances of the present case.

Examining the legal position relating to condonation of delay under section 5 of the Limitation Act, 1963 (in short, "the 1963 Act") it may be observed that the honourable Supreme Court in Oriental Aroma Chemical Industries Ltd. Vs. Gujarat Industrial Development Corporation and Another, laying down the broad principles for adjudicating the issue of condonation of delay, in paras 14 and 15 observed as under:

"14. We have considered the respective submissions. The law of limitation is founded on public policy. The Legislature does not prescribe limitation with the object of destroying the rights of the parties but to ensure that they do not resort to dilatory tactics and seek remedy without delay. The idea is that every legal remedy must be kept alive for a period fixed by the Legislature. To put it differently, the law of limitation prescribes a period within which legal remedy can be availed for redress of the legal injury. At the same time, the courts are bestowed with the power to condone the delay, if sufficient cause is shown for not availing the remedy within the stipulated time.

The expression ''sufficient cause'' employed in section 5 of the Limitation Act, 1963 and similar other statutes is elastic enough to.. enable the courts to apply the law in a meaningful manner which subserves the ends of justice. Although, no hard-and-fast rule can be laid down in dealing with the applications for condonation of delay, this court has justifiably advocated adoption of a liberal approach in condoning the delay of short duration and a stricter approach where the delay is inordinate-- Collector, Land Acquisition, Anantnag and Another Vs. Mst. Katiji and Others, , N. Balakrishnan Vs. M. Krishnamurthy, and Vedabai @ Vaijayanatabai Baburao Pateil Vs. Shantaram Baburao Patil and Others, ."

It was further noticed by the honourable apex court in R.B. Ramlingam Vs. R.B. Bhvaneswari, as under:

"....It is not necessary at this stage to discuss each and every judgment cited before us for the simple reason that section 5 of the Limitation Act, 1963 does not lay down any standard or objective test. The test of ''sufficient cause'' is purely an individualistic test. It is not an objective test. Therefore, no two cases can be treated alike. The statute of limitation has left the concept of ''sufficient cause'' delightfully undefined, thereby leaving to the court a well-intentioned discretion to decide the individual cases whether circumstances exist establishing sufficient cause. There are no categories of sufficient cause. The categories of sufficient cause are never exhausted. Each case spells out a unique experience to be dealt with by the court as such."

It was also recorded that:

"For the aforestated reasons, we hold that in each and every case the court has to examine whether delay in filing the special leave petition stands properly explained. This is the basic test which needs to be applied. The true guide is whether the petitioner has acted with reasonable diligence in the prosecution of his appeal/petition..."

From the above, it emerges that the law of limitation has been enacted which is based on public policy so as to prescribe time-limit for availing of legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to destroy the rights of the parties but to see that the uncertainty should not prevail for unlimited period. Under section 5 of the 1963 Act, the courts are empowered to condone the delay where a party approaching the court belatedly shows sufficient cause for not availing of the remedy within the prescribed period. The meaning to be assigned to the expression "sufficient cause" occurring in section 5 of the 1963 Act should be such so as to do substantial justice between the parties. The existence of sufficient cause depends upon facts of each case and no hard-and-fast rule can be applied in deciding such cases.

The honourable apex court in Oriental Aroma Chemical Industries Ltd. Vs. Gujarat Industrial Development Corporation and Another, and R.B. Ramlingam Vs. R.B. Bhvaneswari, noticed that the courts should adopt liberal approach where delay is of short period whereas the proof required should be strict where the delay is inordinate. Further, it was also observed that judgments dealing with the condonation of delay may not lay down any standard or objective test but is purely an individualistic test. The court is required to examine while adjudicating the matter relating to condonation of delay on exercising judicial discretion on individual facts involved therein. There does not exist any exhaustive list constituting sufficient cause. The applicant/petitioner is required to establish that inspite of acting with due care and caution, the delay had occurred due to circumstances beyond his control and was inevitable.

The question regarding whether there is sufficient cause or not, depends upon each case and is to be decided taking totality of events which had taken place in a particular case. Learned counsel for the appellant submitted that due to different levels of decision making authorities, there was delay in taking the final decision of filing the appeal before the Tribunal. It was urged that the delay, if any, has occurred in the aforesaid circumstances in filing the appeal before the Tribunal. Learned counsel further argued that the delay was unintentional and due to the circumstances beyond the control of the appellant.

The explanation furnished by the appellant appears to be plausible and, therefore, leads to the conclusion that there was sufficient cause for delay in filing the appeal. Once that was so, the delay in filing the appeal before the Tribunal deserves to be condoned and appeal heard on merits by the Tribunal.

This court in Aptech Engineers Vs. State of Haryana and Others, while examining the legal position under similar circumstances had condoned the delay and remitted the matter to the Tribunal to adjudicate the dispute on merits in accordance with law. In view of the above, the present appeal is allowed and the order dated July 31, 2013 (annexure A4) is set aside. Consequently, the delay of 155 days in filing the appeal before the Tribunal stands condoned and the matter is remitted to the Tribunal to adjudicate the dispute on merits in accordance with law. The substantial question of law is answered accordingly.