Challenge on Application filed u/s 35-C(2) of the Excise Act: Bombay HC blames for Wasting Judicial time for no valid reason [Read Order]

Sanvijay Rolling and Engineering Ltd., the applicant filed the petition. Sub-section (2) of Section 35-G provides that the party aggrieved by an order passed by the appellate tribunal may file appeal to the High Court within a period of 180 days from the date on which the order appealed against is received by the aggrieved party. Sub-section (2a) provides that the High Court may admit the appeal after the expiry of 180 days, if it is satisfied that there was sufficient cause for not filing the same within that period.

The appeal was failed to file within 180 days from the date of receipt of the impugned order. Admittedly, the appellate tribunal has passed order on 22-2-2022. The applicant claimed that the order was received on 3-3-2022. According to the applicant, 180 days period was to expire on 30-8-2022. The appeal has been filed on or about 27-2-2023 and accordingly, delay of 184 days is sought to be condoned.

Master the Latest Amendments in Income Tax Act Click here

It appears that in the meantime i.e. on 7-5-2022, the applicant had filed application for rectification of mistake under Section 35-C(2) of the Act of 1944 before the appellate tribunal seeking rectification of the impugned order. The application was pending at the time of filing present appeal. According to the applicant, if appellate tribunal would have allowed the application for rectification of mistake, then the entire grievance does not survive. Accordingly, applicant awaited outcome of the said application.

The appeal under question is being filed before disposal of the said application. Therefore, it is being filed within 180 days of receipt of the order that would be passed in rectification application. According to the applicant, there is thus no undue delay in filing present appeal, if the date of receipt of the order in rectification application is considered as relevant date. Accordingly, it is argued that there is no delay in filing appeal.

The respondent, through reply, submitted that rectification application was preferred on 17-5-2022 and, order thereon was passed on 11-8-2023 and, therefore, filing appeal in the intervening period i.e. in February, 2023 was not maintainable at all. Learned counsel for the respondent submitted that the law is well settled on this point that the period of limitation for challenging the final order, in the present case, the order dated 22-2-2022 shall start from the date of rejection of rectification application i.e. from 11-8-2023.

The counsel for respondent submitted that the appellant is well aware of the said position of law and, therefore, has pleaded in paragraph no. 7 of the application that the date of order that will be passed in rectification application is a relevant date and, therefore, the appeal that is being filed prior to decision in rectification application will be within the prescribed period.

The scope of Section 35-C(2) is altogether different than the scope of appeal under Section 35-G(2). Under Section 35-C(2), the appellate tribunal is empowered to rectify any mistake apparent from the record and accordingly amend any order passed by it under sub-section (1) of Section 35-C.

Know Practical Aspects of Tax Planning, Click Here

As against, the appeal under Section 35-G is maintainable before the High Court, if it is satisfied that the case involves a substantial question of law. Thus, it is for the petitioner to make up mind whether there is mistake apparent on the face of the record or whether the challenge to impugned order involves substantial question of law which would require detailed hearing.

The applicant cannot simultaneously urge that there is error apparent on the face of record in the order passed by appellate tribunal and at the same time, urge that there involves substantial question of law in a challenge against impugned order. In other words, if it was the case of the applicant that there occurred apparent error on the face of record, he could not have urged for detailed hearing and vice versa.

The applicant filed application for rectification of mistake and pending it, he filed appeal under Section 35-G(2). Further, the applicant was aware that he could have filed appeal only after the rectification application is rejected. In other words, he could not have filed appeal pending rectification application. It is so because the applicant himself has come up with a case that if rectification application is allowed, then nothing survives in the matter.

Thus, unless the rectification application was decided, the applicant could not have filed appeal which if permitted will amount to allowing taking two contrary stands while challenging the same order. Further, such course, if permitted, may result in taking contrary views by two courts.

Section 14 of the Limitation Act carves out an exception excluding the period of limitation when the proceedings are being perceived with due diligence and good faith in a Court which from defect of jurisdiction or other cause of a like nature is unable to entertain it.

The Supreme Court held that in case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature.

Even otherwise, the issue of limitation would have arisen only after receiving order in the proceedings under Section 35-C(2). The applicant, however, filed appeal in the intervening period, that too, without seeking withdrawal of application filed under Section 35-C(2) of the Act of 1944.

The Court held that time limit for filing appeal shall commence from the date of rectification/review order. Thus, the applicant is aware that the time to file appeal will not commence pending decision on rectification application. The Court held that the period of limitation should be calculated from the date of the latest, or rectified, assessment order and not the original order.

Want a deeper insight into the Income Tax Bill, 2025? Click here

The rectification application, in the present case, having been not decided when the appeal was filed before this Court, there arises no question of arisen of cause to prefer appeal. The argument before the High Court was that delay should be condoned considering the fact of pendency of rectification application.

The Court noted that the tribunal did not consider whether the principles of the Limitation Act could apply to condone delay and, therefore, the impugned order was set aside and the appeal was restored for fresh consideration on merit including the reason for delay. Thus, the High Court has not held that the delay could be condoned on account of pendency of rectification application.

A division bench of Justice Anil L. Pansare and Justice Siddheshwar S. Thombre noted that it is not the case of the applicant that proceedings under Section 35-C(2) of the Act of 1944 were not maintainable before the appellate tribunal, rather, the proceedings have been entertained and a decision taken by the appellate tribunal. That being so, there arises no question of exclusion of time in accordance with Section 14 of the Limitation Act.

More so, when the applicant has challenged order dated 30-8-2022 passed by the appellate tribunal, rejecting the application for rectification of mistake. Writ Petition to that effect is filed. Thus, the applicant is maintaining his stand that there occurred apparent error in the impugned order.

It was evident that there was no reason for the applicant to have argued the matter twice, initially through Advocate Shri P. K. Mohta and thereafter by Shri V. Sridharan, Senior Counsel. Further, there appears no justification as to why should on one point, the applicant cite multiple judgments, that too, where the point involved has no connection with the judgments cited by the applicant. The applicant, therefore, carries a blame of consuming judicial time of the Court for no valid reason. The applications are accordingly rejected with costs of Rs. 5,000/- for each application.

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates