M/S Sonia Overseas Pvt Ltd vs Union Of India & Ors

CWP No. 27647 of 2013 -1-

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

CWP No. 27647 of 2013

Date of Decision: 30.9.2014

M/s Sonia Overseas Pvt. Ltd. ....Petitioner.

Versus

Union of India and others

...Respondents.

CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE JASPAL SINGH.

PRESENT: Mr. Jagmohan Bansal, Advocate for the petitioner.

Mr. Sunish Bindlish, Advocate for the respondents.

AJAY KUMAR MITTAL, J.

1. In this writ petition filed under Articles 226/227 of the

Constitution of India, the petitioner has prayed for issuance of a writ in

the nature of certiorari for quashing the order-in-appeal dated

27.11.2013 (Annexure P-14) passed by the Commissioner (Appeals)

under Section 128 of the Customs Act, 1962 (in short "the 1962 Act")

vide which respondent No.4 had dismissed the application for

condonation of delay as well as the main appeal.

2. Put shortly, the facts, necessary for adjudication of the

instant petition as narrated therein may be noticed. The petitioner

imports Zinc ash and Zinc Skimming for manufacture of fertilizer used by

the farmers for agriculture purposes. The respondents in respect of

goods imported assessed all the consignments taking assessable value

GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -2-

as 40% of the London Metal Exchange (LME) which was considered in

case of material without metallic contents and in case of metallic

contents, value was further loaded as per formula (Annexure P-1) laid

down by the Commissioner of Customs, Nhava Sheva. Various

importers filed CWP No. 6292 of 2010 before this Court against the

parameters laid by the respondents. This Court vide order dated

7.4.2010 (Annexure P-2) disposed of the writ petition and directed the

Chief Commissioner, Central Excise and Customs to look into the matter

and take a decision thereon in accordance with law. In pursuance of the

order passed by this Court, the Chief Commissioner vide order dated

7.5.2010 (Annexure P-4) approved the formula. The Commissioner

(Appeals) also upheld the application of formula. The Commissioner

(Appeals) vide order dated 15.1.2010 (Annexure P-3) upheld the

assessment order passed by the adjudicating authority. The importers

filed CWP Nos. 9146-52 of 2010 for quashing of the assessment order

dated 15.1.2010 (Annexure P-3) and order dated 7.4.2010 (Annexure P-

4) passed by the Chief Commissioner. This Court vide order dated

1.12.2010 (Annexure P-5) while disapproving the formula, quashed the

aforesaid orders (Annexures P-3 and P-4) and remanded the matter to

the Assessing Officer to pass a fresh order in accordance with law.

Thereafter, M/s Gupta Agri Care (P) Ltd. imported a consignment after

passing of order dated 1.12.2010 by this Court and filed bill of entry and

declared assessable value to the tune of USD 1125 PMT. However,

respondent No.2 assessed the value of the consignment as USD 1217

PMT. M/s Gupta Agri Care (P) Ltd. filed CWP No. 1773 of 2011 before

this Court against the assessment order dated 10.1.2011 and this Court

vide order dated 18.3.2011 (Annexure P-6) allowed the writ petition. The GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -3-

assessment order dated 10.1.2011 was quashed and the matter was

remanded to the Assessing Officer for deciding the same afresh in

accordance with law. After that, on imported consignments, bill of entry

was assessed on transaction value (Annexure P-7). In January 2013,

the respondent started making assessment on the basis of formula laid

down by the Commissioner of Customs, Nhava Sheva. In April, 2013,

one container of Zinc Skimming was imported by the petitioner from

Metaenterprices Ltd, United Kingdom. The petitioner filed bill of entry

No. 9983040 dated 29.4.2013 along with copy of quality certificate,

commercial invoice and packing list. The respondent drew the samples

and sent the same for test to the Central Revenue Control Laboratory

(CRCL), New Delhi and received the report in the third week of May,

2013. The Customs House Agent of the petitioner visited the office of

the respondent and he was shown the copy of the test report. As per the

test report, total zinc contents were 70% and metallic contents were 8%.

The petitioner declared the value of the goods as USD 605 PMT. It was

asked to write on the bill of entry that goods be assessed as per formula.

However, the respondent unofficially detained the consignment of the

petitioner. The petitioner filed CWP No. 12322 of 2013 before this Court

for release of consignment. During the pendency of the writ petition, the

respondent issued a show cause notice dated 12.6.2013 (Annexure P-9)

for assessing the value in terms of the formula. The petitioner filed a

reply dated 22.6.2013 (Annexure P-10) to the said show cause notice.

The adjudicating authority vide order dated 16.7.2013 (Annexure P-11)

assessed the value applying the formula. However, the petitioner paid

short duty amounting to ` 15,693/-. The petitioner filed amended writ

petition seeking quashing of the order dated 16.7.2013 (Annexure P-11). GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -4-

Since the said order was appealable, this Court vide order dated

31.10.2013 (Annexure P-12) disposed of the writ petition and relegated

the petitioner to the remedy of appeal. It was further observed that in

case the appeal was barred by limitation, the application of the petitioner

shall be considered sympathetically taking into consideration pendency

of the writ petition and the appeal shall be decided on merits. The

application for condonation of delay was directed to be decided within 15

days of its filing. Thereafter, the petitioner filed an appeal along with

application for condonation of delay pleading for exclusion of time in

terms of Section 14 of Limitation Act, 1963 (in short "the 1963 Act")

before respondent No.4 against the order dated 16.7.2013 (Annexure P-

11). The Commissioner (Appeals) vide order dated 27.11.2013

(Annexure P-14) dismissed the application for condonation of delay as

well as the main appeal. Hence, the present writ petition.

3. The following twin issues that arise for resolving the

controversy raised herein are:-

(i) Whether the time spent in prosecuting litigation

diligently and bonafide before the

Commissioner (Appeals) under the 1962 Act is

to be excluded under Section 14 of the 1963 Act

while determining whether the appeal was

within limitation or not?

(ii) Whether the Commissioner (Appeals) under the

1962 Act could be considered as 'Court' within

the meaning of Section 14 of 1963 Act.

4. Adverting to issue No. (i), Section 14 and relevant portion of

Section 29(2) of the 1963 Act, necessary for the purpose of deciding the GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -5-

lis provide as follows:-

"14 Exclusion of time of proceeding bona fide in court

without jurisdiction. --

(1) In computing the period of limitation for any suit

the time during which the plaintiff has been

prosecuting with due diligence another civil

proceeding, whether in a court of first instance or of

appeal or revision, against the defendant shall be

excluded, where the proceeding relates to the same

matter in issue and is prosecuted in good faith in a

court which, from defect of jurisdiction or other cause

of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any

application, the time during which the applicant has

been prosecuting with due diligence another civil

proceeding, whether in a court of first instance or of

appeal or revision, against the same party for the

same relief shall be excluded, where such proceeding

is prosecuted in good faith in a court which, from

defect of jurisdiction or other cause of a like nature, is

unable to entertain it.

(3) Notwithstanding anything contained in rule 2 of

Order XXIII of the Code of Civil Procedure, 1908 (5 of

1908), the provisions of sub-section (1) shall apply in

relation to a fresh suit instituted on permission granted

by the court under rule 1 of that Order where such

permission is granted on the ground that the first suit GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -6-

must fail by reason of a defect in the jurisdiction of the

court or other cause of a like nature.

Explanation.-- For the purposes of this section,--

(a) in excluding the time during which a

former civil proceeding was pending, the day on

which that proceeding was instituted and the

day on which it ended shall both be counted;

(b) a plaintiff or an applicant resisting an

appeal shall be deemed to be prosecuting a

proceeding;

(c) misjoinder of parties or of causes of

action shall be deemed to be a cause of a like

nature with defect of jurisdiction."

"29(2). Where any special or local law prescribes for

any suit, appeal or application a period of limitation

different from the period prescribed by the Schedule,

the provisions of Section 3 shall apply as if such

period were the period prescribed by the Schedule

and for the purpose of determining any period of

limitation prescribed for any suit, appeal or application

by any special or local law, the provisions contained in

sections 4 to 24 (inclusive) shall apply only in so far

as, and to the extent to which, they are not expressly

excluded by such special or local law."

5. The following conditions have to be satisfied for taking

benefit of Section 14 of the 1963 Act:-

"(1) Both the prior and subsequent proceedings are GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -7-

civil proceedings prosecuted by the same party;

(2) The prior proceeding had been prosecuted with

due diligence and in good faith;

(3) The failure of the prior proceeding was due to

defect of jurisdiction or other cause of like nature;

(4) The earlier proceeding and the latter

proceeding must relate to the same matter in issue

and;

(5) Both the proceedings are in a court;

(6) The above conditions must co-exist."

6. Section 14 of 1963 Act is contained in Part III of the Act

which provides for 'Exclusion of Time' for computation of period of

limitation. On a plain reading of Section 14 of the 1963 Act, it becomes

clear that the legislature has enacted the said section to exempt a

certain period covered by a bona fide litigious activity and it is required to

be interpreted so as to advance the cause of justice rather than abort the

proceedings. While applying this provision, it has to be kept in mind that

an element of mistake is inherent in the invocation of Section 14 and it is

intended to provide relief against the bar of limitation in cases of

mistaken remedy or selection of a wrong forum.

7. Under Section 29(2) of the 1963 Act, Sections 4 to 24

(inclusive) shall apply to the special statute only in so far as, and to the

extent, they are not expressly excluded by such special or local law. If

none of them are excluded, then in that situation all of them would be

applicable. In our opinion, the language mentioned in Section 29(2) of

the 1963 Act does not require that the special statute should expressly

provide for exclusion of specific provision but it is to be gathered from GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -8-

the substance of the language mentioned in the statute whether the

effect thereof is nothing but exclusionary. The Supreme Court in Union

of India v. Popular Construction AIR 2001 SC 4010 while analyzing

Section 29(2) of the 1963 Act in view of its earlier decision in Hukumdev

Narain Yadav v. Lalit Narain Mishra AIR 1974 SC 480 had observed as

under:-

"Apart from the language, 'express exclusion' may

follow from the scheme and object of the special or

local law. "Even in a case where the special law does

not exclude the provisions of Sections 4 to 24 of the

Limitation Act by an express reference, it would

nonetheless be open to the Court to examine whether

and to what extent the nature of those provisions or

the nature of the subject-matter and scheme of the

special law excluded their operation."

8. The 1962 Act is a Special Statute. Under Section 128(1) by

the said Act, remedy of appeal has been provided as under:-

"128 (1). Any person aggrieved by any decision or

order passed under this Act by an officer of customs

lower in rank than a Commissioner of Customs may

appeal to the Commissioner (Appeals) within sixty

days from the date of the communication to him of

such decision or order:

Provided that the Commissioner (Appeals) may, if he

is satisfied that the appellant was prevented by

sufficient cause from presenting the appeal within the

GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -9-

aforesaid period of sixty days, allow it to be presented

within a further period of thirty days."

9. We have to see the scheme of the special law under the

1962 Act. The nature of the remedy provided therein are such that the

legislature intended it to be a complete Code by itself which alone should

govern the several matters provided by it. The 1962 Act is an

independent Act as from perusal of various chapters and sections

thereof, it is clear that it provides for search, seizure, arrest, confiscation

of goods, conveyance, imposition of penalties, settlement of cases,

appeals including the appeal to the Supreme Court and hearing before

the Supreme Court, period of limitation, offences and prosecution. Being

a complete Code by itself, the nature of remedy provided therein would

be governed by the said Act. If, on an examination of the relevant

sections, it is clear that the provisions of the 1963 Act are necessarily

excluded, then the benefits conferred therein cannot be called in aid to

supplement the provisions of the Act. As noticed above, wherever the

special law does not exclude the provisions of Sections 4 to 24 of the

1963 Act by an express reference, it would nonetheless be open to the

court to examine whether and to what extent, the nature of those

provisions or the nature of the subject-matter and scheme of the special

law exclude their operation. In other words, the applicability of the

provisions of the 1963 Act, therefore, to be judged not from the terms of

the 1963 Act but by the provisions of the 1962 Act relating to filing of

appeal. Upon the words used in the section, it is not possible to sustain

the interpretation that the principle underlying Section 14, namely, that

the bar of limitation should not affect a person honestly doing his best to

get his case tried on merits but failing because the court is unable to give GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -10-

him such a trial, would not be applicable to an appeal filed under Section

128 of the 1962 Act. The principle is clearly applicable not only to a case

in which a litigant brings his application in the court, that is, a court

having no jurisdiction to entertain it but also where he brings the suit or

the application in the wrong court in consequence of bonafide mistake or

law or defect of procedure. Neither there is any express provision nor by

necessary implication, it could be concluded that applicability of Section

14 of 1963 Act to an appeal filed under Section 128 of the 1962 Act

would stand excluded. Thus, having regard to the intention of the

legislature, this Court is of the firm opinion that the equity underlying

Section 14 should be applied to its fullest extent and time taken diligently

pursuing a remedy, in a wrong court, should be excluded.

10. The Division Bench of this Court in Vijay Brothers and

others v. Union of India and three others 1989 (40) ELT 51 (P&H)

dealing with similar situation had held that Section 14 of 1963 Act was

applicable to proceedings under Section 128 of the 1962 Act. It was

recorded as under:-

"The provisions of Section 29 of the Limitation Act,

1963 are clear and also covered by the Authority of

decision in Mangu Ram v. Municipal Corporation of

Delhi - AIR 1976 SC 105. According to it unless

application of Section 14 of the said Act is expressly

excluded by a special law, it shall be applied to the

special law. The Supreme Court was of the view in the

Commissioner of Sales Tax, Uttar Pradesh v. Parson

Tools and Plates, Kanpur - AIR 1975 SC 1039, that

there are three features in the scheme of Act which GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -11-

unmistakingly go to show that the legislature had

deliberately excluded the application of Sections 5

and 14 of Limitation Act - (i) no limitation has been

prescribed for suo motu exercise of its jurisdiction by

the Revising Authority, (ii) Period of one year

prescribed as limitation in filing revision application is

unnecessarily long; and (iii) Revising Authority has no

discretion to extend this period beyond a period of six

months, even on sufficient cause.

The only point, therefore, for consideration is

whether there is any thing in Section 128 of the

Customs Act, 1962, which expressly excluded the

applicability of Section 14 to it. The limitation of three

months provided under the main part of Section 128

of the Customs Act, 1962 is the normal provision for

an appeal. Neither it is extraordinary, nor can it be

called as unusually a long period so as to make it

unconscionable to think that the time taken by the

party in seeking the same relief in good faith in a

different forum has to be excluded. Nor is there any

provision in the Customs Act, which enables a party to

invoke the suo motu appellate powers. None of the

three features which were pointed out in above said

Supreme Court judgment are available in this case

under Section 128 of Customs Act, 1962 in order to

come to the conclusion that the provision deliberately

excluded applicability of Section 14 of the Limitation GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -12-

Act, 1963. Thus, Section 14 is applicable to the

proceedings under Section 128 of the Customs Act,

1962."

11. The Supreme Court in State of Goa v. M/s Western

Builders, AIR 2006 SC 2575 held that Section 14 of the 1963 Act is

applicable to Section 34 of the Arbitration and Conciliation Act, 1996 as

there is no specific prohibition and statute should be interpreted which

advances the cause of justice. This view was reiterated by three Judges

Bench of the Apex Court in M/s Consolidated Engg. Enterprises v.

Principal Secretary, Irrigation Department and others, 2008(7) SCC

169.

12. The judgments in Hukumdev Narain Yadav and Popular

Construction's cases (supra); Gopal Sardar v. Karuna Sardar AIR

2004 SC 3068; Commissioner of Customs and Central Excise v.

Hongo India (P) Ltd. 2009 (2336) ELT 417 (SC); Union of India v.

Jagadish Prasad Jalan 2012 (ELT 525 (Cal) (FB); Raj Chemicals v.

Union of India 2013 (287) ELT 145 (Bom) (DB) and Kaizen Organics

Pvt. Ltd. v. UOI 2013 (293) ELT 326 (Raj) (DB) relied upon by learned

counsel for the respondents are relating to applicability of Section 5 of

1963 Act. Section 5 of the 1963 Act falls under Part II relating to

'Extension of prescribed period in certain cases' for limitation of suits,

appeals and application. What proviso to Section 128 of 1962 Act

contemplates is regarding extension of limitation in terms of Section 5

and does not relate to exclusion of time contemplated under Section 14

of 1963 Act. In our opinion, 'Exclusion of time' for computation of period

of limitation under Section 14 of 1963 Act is one thing and 'Extension of

GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -13-

prescribed period in certain cases under Section 5 of 1963 Act is

another. Two things cannot be equated as similar. Further, there is

fundamental distinction between the discretion to be exercised under

Section 5 of the 1963 Act and exclusion of the time provided in Section

14 of the said Act. The power to excuse delay and grant an extension of

time under Section 5 is discretionary whereas under Section 14,

exclusion of time is mandatory, if the requisite conditions are satisfied.

Section 5 is broader in its sweep, than Section 14 in the sense that a

number of widely different reasons can be advanced and established to

show that there was sufficient cause in not filing the appeal or the

application within time. The ingredients in respect of Sections 5 and 14

are different. The effect of Section 14 is that in order to ascertain what is

the date of expiration of the 'prescribed period', the days spent in

prosecuting the prior proceedings before wrong forum with due

diligence, have to be added to what is primarily the period of limitation

prescribed. There being distinction between applicability of provisions of

Sections 5 and 14 of 1963 Act as they operate in different scenario, no

advantage can be derived by learned counsel for the respondent from

these pronouncements. Accordingly, issue No. (i) is held in favour of the

petitioner.

13. Examining the issue whether the Commissioner (Appeals)

would satisfy the test of being a 'Court' within the meaning of Section 14

of the 1963 Act, it may be noticed that drawing support from the

Constitution Bench judgments in The Bharat Bank Ltd., Delhi v. The

Employees of the Bharat Bank, Ltd., Delhi and the Bharat Bank

Employee's Unions, Delhi, AIR (37) 1950 Supreme Court 188 and

Maqbool Hussain v. State of Bombay AIR 1953 SC 325, the Supreme GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -14-

Court in P. Sarathy v. State Bank of India, AIR 2000 SC 2023 had

authoritatively pronounced that the Deputy Commissioner of Labour

(Appeals) which was an authority constituted under Section 41(2) of the

Tamil Nadu Shops and Establishments Act, 1947 to hear and decide

appeals was a 'Court' within the meaning of Section 14 of the 1963 Act

and the proceedings before him were civil proceedings. It was observed

as under:-

"15. Applying the above principles in the instant

case, we are of the opinion that the Deputy

Commissioner of Labour (Appeals), which was an

Authority constituted under Section 41(2) of the Tamil

Nadu Shops and Establishments Act, 1947 to hear

and decide appeals, was a "court" within the meaning

of Section 14 of the Limitation Act and the

proceedings pending before him were civil

proceedings. It is not disputed that the appellant could

file an appeal before the Local Board of the Bank,

which was purely a departmental appeal. In this view

of the matter, the entire period of time from the date of

institution of the departmental appeal as also the

period from the date of institution of the appeal under

Section 41(2) before the Deputy Commissioner of

Labour (Appeals) till it was dismissed will, therefore,

have to be excluded for computing the period of

limitation for filing the suit in question. If the entire

period is excluded, the suit, it is not disputed, would

be within time."

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14. It was noticed as under:-

"It will be noticed that Section 14 of the Limitation Act

does not speak of a "civil court" but speaks only of a

"court". It is not necessary that the court spoken of in

Section 14 should be a "civil court". Any Authority or

Tribunal having the trappings of a court would be a

"court" within the meaning of this Article."

15. Following the aforesaid pronouncement, Karnataka High

Court in HMT Ltd. v. Commissioner of Customs, Chennai, 2009 (239)

ELT 239 had expressed similar view.

16. Further, Single Judge of this Court in Pritam Kaur v. Sher

Singh, AIR 1983 Punjab 363 had opined in the same manner as

under:-

"...Thus, for all intents and purposes the Collector

under the Act will be deemed to be the Court while

deciding the dispute as contemplated under the Act.

The Court contemplated under Section 14 of the

Limitation Act does not necessarily mean the Civil

Court under the Civil Procedure Code. Any Tribunal

or Authority deciding the civil rights of the parties will

be deemed to be a Court for that purpose. In

Bhupendra Singh v. Thakur Gulab Singh, AIR 1966

Rajasthan 92, it has been observed in para 9 thereof

that the word 'Court' used in that section must be

construed liberally. The contention of the counsel in

that case was that the Court of Wards was not a Court

within the meaning of section 14 of the Act which was GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -16-

repelled. Similarly, in Ramdutt Ramkessen Dass v.

E.D. Sasson & Co., AIR 1929 Privy Council 103, it

was held that in the proceedings before the Arbitrator,

he should, exclude the time spent in prosecuting in

good faith, the same claim before another Arbitrator

who was without jurisdiction. In that case Section 14

of the Limitation Act was being considered. In view of

this pronouncement, I am of the considered view that

the proceedings before the Collector will be deemed

to be civil proceedings in a Court."

It was quoted with approval by the Supreme Court in P.

Sarathy's case (supra).

17. The legal position that emerges from the various

pronouncements referred to above is that the provisions of the 1963 Act

apply only to 'courts'. Such courts may not be civil courts. These courts

may not necessarily be constituted under the Code of Civil Procedure or

the Code of Criminal Procedure. The forum that functions as a court or

has trappings of the court would be a court for the purposes of

applicability of the 1963 Act. The jurisdiction to entertain proceedings,

appeals or revisions under the special laws is sometimes given to the

ordinary courts, and sometimes given to separate tribunals constituted

under the special law. Such tribunals constituted under the special law

which function as courts or having trappings of courts may be treated as

courts for the purposes of the 1963 Act but not all bodies or authorities

hearing appeals or revisions under special law, having no trappings of

the court or which do not function as a court. The Commissioner

(Appeals) hears appeals against the order of the authority lower in rank GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -17-

than him and is empowered to decide whether the order was valid or not.

He is required to follow principles of natural justice before deciding the

lis. The order passed by him is binding on the parties. The

Commissioner (Appeals) may not be a civil court within the meaning of

Civil Procedure Code but has trapping of a court and would be a court

within the meaning of Section 14 of the 1963 Act.

18. Learned counsel for the respondent, inter alia, had referred

to the judgments of various High Courts in Navinton Ltd. v. Union of

India 2006 (205) ELT 71 (Bom.); Makjai Laboratories v. CCE, Pune-II

2011 (274) ELT 48 (Bom); Management of M/s Associated Industries

(Assam) Ltd. v. Bipin Behari Singh and another, AIR 1972 Assam 31;

Jokkin Fernadez v. Amina Kunhi Umma, AIR 1974 Kerala 162;

Ulohannan Chacko and others v. Parsad Marakkar and others, AIR

1978 Kerala 161 and Sheetal Enterprises v. UOI 2008(11) STR 219

(Bom) to contend that the Commissioner (Appeals) would not be 'court'

within the provisions of Section 14 of the 1963 Act. Suffice it to notice, in

view of the authoritative and binding pronouncement of the Apex Court in

P. Sarathy's case (supra), the same would not come to the rescue of

the respondents.

19. We now advert to the decision of Three Judges Bench of

the Apex Court in Commissioner of Sales Tax, UP v. M/s Parson

Tools and Plants, AIR 1975 SC 1039 on which main reliance was

placed upon by learned counsel for the respondents. In M/s Parson

Tools and Plants' case (supra), two assessment orders had been

made under the provisions of UP Sales Tax Act, 1948. On May 10,

1963, the appeals filed against the same came up for hearing and the

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same were dismissed in default under Rule 68(5) of the UP Sales Tax

Rules as no one had appeared on behalf of the assessee. However, sub

rule (6) of Rule 68 of that Rule provided for setting aside such dismissal

and readmission of the appeal. Two applications were filed by the

assessee for setting aside the dismissal on the same very day. Sub

Rule (5) of Rule 68 was declared ultra vires by the High Court during the

pendency of those applications whereby it was held that the appeals

against the assessment orders cannot be dismissed in default by the

appellate authority and it was bound to decide the lis on merits even

though the appellant was absent. However, the appellate authority

dismissed the applications on 20.10.1964 in view of Rule 68(5) of the UP

Sales Tax Rules as Rule 68(5) was already declared ultra vires. It was

thereafter that the assessee preferred revision petition on 16.12.1964

against the order of dismissal before the revisional authority which were

belated more than 18 months from the date of dismissal of the appeals.

Two applications for excluding the time spent in prosecuting the abortive

proceedings under Rule 68(6) were also filed. The revisional authority

after condoning the delay heard the revision petitions on merits holding

to be within time. However, two references were made to the High Court

for answering the questions. It was in these facts that the Supreme

Court held the revisional jurisdiction under the UP Sales Tax Act barred

the applicability of Sections 5 and 14 of the 1963 Act. It was held that

the revisional authority under the UP Sales Tax Act was not a court and,

therefore, the provisions of Sections 5 and 14 of the 1963 Act were not

applicable.

20. The provisions of special statute would be required to be

scanned for concluding whether a body, authority or Tribunal empowered GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -19-

to hear appeals or revisions would satisfy the test of being a court. The

provisions of the 1962 Act being different in material and substance from

UP Sales Tax Act, the judgment would not be of any benefit to the

respondents. Subsequent three Judges Bench of the Supreme Court in

M/s Consolidated Engg. Enterprise's case (supra) had also

distinguished the said prouncement in M/s Parson Tools and Plants'

case (supra) in the following terms:-

"15. The plea that in view of the decision rendered

by three Judge Bench of this Court in Commissioner

of Sales Tax, Uttar Pradesh vs. Parson Tools and

Plants, Kanpur 1975(3) SCR 743 the provisions of

Section 14 of the Limitation Act should not be held to

be applicable to an application filed under Section 34

of the Act, has no substance. The question

determined in the Commissioner of Sales Tax, Uttar

Pradesh (supra) was "whether under the

circumstances of the case, Section 14 of the

Limitation Act extended the period for filing of the

revisions by the time during which the restoration

application remained pending as being prosecuted

bona fide. In the said case, Sales-Tax Officer had

made two assessment orders. The assessee had

filed appeals before the Appellate Authority. The

appeals were dismissed in default as the assessee

did not remain present on the specified date. The

assessee filed two applications for setting aside such

dismissal under Rule 68(6) of the U.P. Sales Tax GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -20-

Rules. During the pendency of the application a

Single Judge of Allahabad High Court declared Rule

68(5) of the Rules ultra vires under which the appeals

were dismissed for default. In view of the ruling of

High Court, the Appellate Authority dismissed the

appeals. The assessee, therefore, filed two revision

petitions. They were filed more than 18 months after

the dismissal of the appeals. The revisions were

accompanied by two applications in which the

assessee had prayed for exclusion of time spent by

him in presenting the aborting proceedings under

Rule 68(6) for setting aside the dismissal of his

appeals. The revisional authority excluded the time

spent in those proceedings from computation of

limitation by applying Section 14 of the Limitation Act.

The High Court dismissed the Reference made on the

motion of the Commissioner of Sales-Tax. In appeal,

this Court held that (1) if the legislature in a special

statute prescribes a certain period of limitation, then

the Tribunal concerned has no jurisdiction to treat

within limitation, an application, by excluding the time

spent in prosecuting in good faith, on the analogy of

Section 14(2) of the Limitation Act and (2) the

Appellate Authority and Revisional Authority were not

'courts' but were merely administrative Tribunals and,

therefore, Section 14 of the Limitation Act did not, in

terms, apply to the proceedings before such GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -21-

Tribunals. From the judgment of the Supreme Court

in Commissioner of Sales Tax, U.P. (supra), it is

evident that essentially what weighed with the Court in

holding that Section 14 of the Limitation Act was not

applicable, was that the Appellate Authority and

Revisional Authority were not 'courts'. The stark

features of the revisional powers pointed out by the

court, showed that the legislature had deliberately

excluded the application of the principles underlying

Sections 5 and 14 of the Limitation Act. Here in this

case, the Court is not called upon to examine scope

of revisional powers. The Court in this case is dealing

with Section 34 of the Act which confers powers on

the Court of the first instance to set aside an award

rendered by an arbitrator, on specified grounds. It is

not the case of the contractor that the forums before

which the Government of India undertaking had

initiated proceedings for setting aside the arbitral

award are not 'courts'. In view of these glaring

distinguishing features, this Court is of the opinion that

the decision rendered in the case of Commissioner of

Sales Tax, Uttar Pradesh, Lucknow (supra) did not

decide the issue which falls for consideration of this

Court and, therefore, the said decision cannot be

construed to mean that the provisions of Section 14 of

the Limitation Act are not applicable, to an application

submitted under Section 34 of the Act of 1996." GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -22-

21. The Division Bench of this Court in Vijay Brothers and

others' case (supra) had elaborately dealt with the judgment in M/s

Parson Tools and Plants's case (supra) and after noticing the

distinguishing features under the 1962 Act held that Section 14 of the

1963 Act was applicable.

22. Similarly decisions of the Apex Court in Ujjam Bai v. State

of UP, AIR 1962 SC 1621, Jagan Nath Prasad and another v. State of

UP, AIR 1963 SC 416, Town Municipal Council v. Presiding Officer,

Labour Court, AIR 1969 SC 1335, Nityanand M. Joshi and another v.

LIC AIR 1970 SC 209, Smt. Sushila Devi v. Ramanandan Prasad and

others AIR 1976 SC 177, Sakuru v. Tanaji 1985 (22) ELT 327, Birla

Cement Works v. General Manager, Western Railways and another AIR 1995 SC 1111, Prakash H. Jain v. Ms. Marie Fernandes AIR 2003

SC 4591 and Officer on Special Duty (Land Acquisition) v. Shah

Mani Lal Chandulal etc. 1996 (9) SCC 414 on the basis of which

support was sought to be gathered by learned counsel for the

respondents are all relating to different statutes and, thus, do not

advance his case.

23. For the foregoing reasons, we are of the view that Section

14 of the 1963 Act is applicable to the proceedings under the 1962 Act in

respect of an appeal provided under Section 128 and the time spent in

the High Court in the abortive attempt to invoke its jurisdiction under

Articles 226/227 of the Constitution will have to be excluded. After

excluding the time in pursuing the litigation, the appeal filed before the

Commissioner (Appeals) would be within the period of limitation. The

bona fides of the petitioner in pursuing the remedy under Articles

GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh CWP No. 27647 of 2013 -23-

226/227 of the Constitution was never in dispute. Accordingly, the writ

petition is allowed and the impugned order dated 27.11.2013 (Annexure

P-14) is set aside. The matter is remitted to the appellate authority who

shall proceed to decide the appeal on merits in accordance with law.

(AJAY KUMAR MITTAL) JUDGE

September 30, 2014 (JASPAL SINGH) gbs JUDGE

GURBACHAN SINGH 2014.10.01 15:16 I attest to the accuracy and authenticity of this document High Court Chandigarh