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SUPREME COURT OF INDIA
K.S. HEGDE AND A.N. GROVER, JJ.
M/s. Lalta Prasad Khinni Lal, Appellant
Versus
Assistant Commissioner (Judicial) Sales Tax, Kanpur Range I, Kanpur and another, Respondents.
Civil Appeal No. 2571 of 1969, D/- 6-10-1971.
Advocates appeared
Mr. S. Markandeya Advocate for Appellant; Dr. L. M. Singhvi, Senior Advocate (Mr. O. P. Rana, Advocate, with him), for Respondents.
U. P. Sales Tax, Act, 1948 - Section 9, 9(6) and (1) - Limitation Act, 1908 - Section 5 - Constitution of India, 1950 - Article 226 - Indian Income-tax Act 1922 - Section 30 (1) and (2) - Hindu Undivided Family - Assessment Year - Assessed to Sales Tax - Whether delay in depositing admitted tax should be condoned - Whether appeal should be entertained or not - Whether there has been sufficient cause for not preferring appeal within statutory period - Whether under sub-s. (6) of Section 9, there was sufficient cause for excusing delay in preferring appeal - Whether on facts of present case appellate authority would have condoned delay or not – Held, If an appeal was filed, though after prescribed period of time, Assistant Commissioner had jurisdiction to hear appeal after tax due was paid - Only possible objection that could have been raised was that appeal was barred as having been filed beyond period prescribed by Section 30 (2) - But appellate authority had jurisdiction to excuse delay - Ratio of this decision is that even though payment of tax was a condition precedent to maintainability of appeal delay could be condoned under Section 30 (2) thus treating appeal as having been filed when amount of tax was paid - Indeed according to that decision words "no appeal shall be entertained" in proviso to S. 9 do not denote filing of memorandum of appeal but refer to point of time when appeal is being considered - Therefore, though memorandum of appeal filed within time is not accompanied by treasury chalan showing payment of tax if before appeal is being considered satisfactory proof of payment of tax is given then proviso to S. 9 is satisfied - In present case when assessee produced necessary documents which showed that deposit of full amount had been made appeal became entertainable - It only suffered from defect that it was barred by time on that date - Assessee could, therefore, apply under Section 9 (6) for extending period of limitation in accordance with Section 5 of Limitation Act - Appellate authority had no jurisdiction to extend time simply because amount of admitted tax had been deposited beyond period of 30 days would be wholly erroneous and would not represent a true and correct view of provisions of Section 9 - It may be pointed out that case on which High Court largely relied did not involve question of extension of period of limitation under Section 9 (6) - Indeed in judgement word "entertain" in Section 9 (1) has hardly any material bearing on point under consideration - As appellant authority disposed of appeal on short ground that it was barred by time and that it had no jurisdiction to extend period of limitation this matter will have to go back for reconsideration and redecision of that authority - In result the appeal is allowed and judgement of High Court is set aside - Case is remitted to High Court for making appropriate directions for reconsideration and rehearing of appeal by appellate authority under Act - Appeal allowed.
Judgment
GROVER, J.:- This is an appeal by certificate from a judgement of the Allahabad High; Court in which the main point involved relates to the provisions of Section 9 of the U. P. Sales Tax, Act, 1948, hereinafter called the Act .
2. The facts lie in a narrow compass. Lalta Prasad Khinni Lal a Hindu undivided family which is the assessee carried on business of manufacturing oils. For the assessment year 1963-64 it was assessed to sales tax under the Act by an order dated July 28, 1965. The assessee had been filing its quarterly returns and had deposited a sum of Rs. 3,153.01 which was the admitted amount of its tax liability. The Sales tax Officer, however, made an assessment enhancing the turnover which resulted in increase of the amount of tax. The assessee filed an appeal on October 21, 1965 which was three days before the period of limitation prescribed for filing the appeal was to expire. There was some difficulty about encashment of a cheque which had been deposited along with the rest of the cash amount towards payment of the amount of tax the liability for which stood admitted. The total payment was not made of the entire amount until May 27, 1966, when the treasury challan was produced. The assessee filed an application under Section 5 of the Indian Limitation Act praying for condonation of delay, if any, in filing the appeal. The Assistant Commissioner (Judicial) Sales Tax rejected the memorandum of appeal as defective on the ground that the deposit of the amount of tax admitted to be due had not been made within the period of limitation and that the delay in doing so could not be condoned under Section 5 of the Limitation Act.
3. The assessee filed a petition under Article 226 of the Constitution in the High Court challenging the order of the Assistant Commissioner (Judicial) Sales Tax. That petition was dismissed on the ground that although the appeal was filed within time there was delay in making the necessary deposit of the admitted tax and that delay could not be condoned under Section 5 the Limitation Act.
4. Section 9 of the Act deals with an appeal against an order of assessment. It provides that any dealer objecting to an order under the various sections mentioned in sub-s. (1) may within 30 days appeal to such authority as may be prescribed. The proviso to sub-section (1) is material and is set out below:
"Provided that no appeal against an assessment shall be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to be due or of such instalments thereof as may have become payable:
Provided, secondly, that the appellate authority shall not exercise any powers or perform any other function except those conferred on or entrusted to him as such authority."
Sub-section (6) of Section 9 provides that Section 5 of the Indian Limitation Act 1908 shall apply to appeals under the Act. The relevant Rules may next be reproduced:
R. 66 (2) "The memorandum of appeal shall be accompanied by adequate proof of payment of the fee payable and a certified copy of the order appealed against and the challan showing deposit in the treasury of the tax admitted by the appellant to be due, or of such instalments thereof as might have become payable."
Rule 67 (3) "If the memorandum of appeal is not in order it may be rejected or be returned, after the necessary endorsement on its back about its presentation and return, to the applicant for correction and representation within the time to be fixed by the Assistant Commissioner (Judicial) or be amended then and there."
A Full Bench of the Allahabad High Court considered the question of the applicability of Section 5 of the Limitation Act to a case where the admitted amount of tax is not deposited by the appellant within the time prescribed for filling the appeal in Janta Cycle and Motor Mart v. Asst. Commissioner (J.) III, Sales Tax Kanpur Range, Kanpur, 22 STC 94(FB). The full bench relied on an observation of this Court
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