Delay cannot be Condoned in VAT Revision Cases filed before High Courts: SC [Read Judgment]

Supreme Court - Tax

In a recent decision, the two-judge bench of the Supreme Court comprising of Justice A.K. Sikri and Justice A.M. Sapre held that provisions of Section 5 of the Limitation Act, 1963, are not applicable in respect of revision petitions filed in the high court under Section 81 of the Assam Value Added Tax Act, 2003.

In the instant case, the appellant, M/s Patel Brothers, approached the apex Court against the order of the High Court wherein the Court rejected the plea of condonation of delay of 335 days and held that there is no provision for condoning delay beyond 60 days of statutory time limit for filing revision under the Act.

Concurring with the findings of the High Court, the bench noted that as per s. 84, only sections 4 and 12 of the Limitation Act are applicable to the VAT proceedings,which is would specifically reveal the legislative intention to exclude the other provisions including s. 5 of the Limitation Act.

“In the instant case, we find that Section 84 of the VAT Act made only Sections 4 and 12 of the Limitation Act applicable to the proceedings under the VAT Act.The apparent legislative intent, which can be clearly evinced, is to exclude other provisions, including Section 5 of the Limitation Act.

“Section 29(2) stipulates that in the absence of any express provision in a special law, provisions of Sections 4 to 24 of the Limitation Act would apply. If the intention of the legislature was to make Section 5, or for that matter, other provisions of the Limitation Act applicable to the proceedings under the VAT Act, there was no necessity to make specific provision like Section 84 thereby making only Sections 4 and 12 of the Limitation Act applicable to such proceedings, inasmuch as these two Sections would also have become applicable by virtue of Section 29(2) of the Limitation Act. It is, thus, clear that the Legislature intended only Sections 4 and 12 of the Limitation Act, out of Sections 4 to 24 of the said Act, applicable under the VAT Act thereby excluding the applicability of the other provisions.”

Rejecting the contention of the appellant that the ratio laid down in Mangu Ram is applicable in the instant case, the bench clarified that the said decision is not applicable to the instant case since the VAT Act is a complete code not only laying down the forum but also prescribing the time limit within which each forum would be competent to entertain the appeal or revision.

“The underlying object of the Act appears to be not only to shorten the length of the proceedings initiated under the different provisions contained therein, but also to ensure finality of the decision made there under. The fact that the period of limitation described therein has been equally made applicable to the assessee as well as the revenue lends ample credence to such a conclusion. We,therefore, unhesitantly hold that the application of Section 5 of the Limitation Act, 1963 to a proceeding under Section 81(1) of the VAT Act stands excluded by necessary implication, by virtue of the language employed in section 84.”

Read the full text of the Judgment below.