State of Kerala v. Harrison Malayalam Ltd.

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HON'BLE THE CHIEF JUSTICE MR.J.CHELAMESWAR & THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 31ST JANUARY 2011 / 11TH MAGHA 1932 ST.Rev..No. 202 of 2010 ------------------------TA.385/2007 of KERALA SALES TAX APPELLATE TRIBUNAL, ADDL.BENCH,ERNAKULAM, Dated 15/05/09 .................... ## REVISION PETITIONER/RESPONDENT/REVENUE: STATE OF KERALA, REPRESENTED BY DEPUTY COMMISSIONER(LAW),COMMERCIAL TAXES, BY GOVERNMENT PLEADER, SRI.K.P PRADEEP RESPONDENT/APPELLANT/ASSESSEE: M/S.HARRISON MALAYALAM LTD., WILLINGDON ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.PAULOUSE C. ABRAHAM SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 17/01/2011, ALONG WITH ST.Rev.No. 203 of 2010 AND CONNECTED CASES, THE COURT ON 31/01/2011 PASSED THE FOLLOWING: ## **J. CHELAMESWAR, C.J. & P.R. RAMACHANDRA MENON J.** ------------------------------------------------------------------------ S.T.Rev.No.202 of 2010 & C.M.Appln.No.595 of 2010, S.T.Rev.No.203 of 2010 & C.M.Appln.No.599 of 2010 , S.T.Rev.No.204 of 2010 & C.M.Appln.No.600 of 2010, S.T.Rev.No.207 of 2010 & C.M.Appln.No.607 of 2010, S.T.Rev.No.209 of 2010 & C.M.Appln.No.609 of 2010, S.T.Rev.No.210 of 2010 & C.M.Appln.No.610 of 2010 & S.T.Rev.No.211 of 2010 & C.M.Appln.No.611 of 2010 . ------------------------------------------------------------------------- Dated, this the 31[st] day of January, 2011 ## **ORDER** ## **J. Chelameswar, C.J.** All these Sales Tax Revisions arise out of a common order of the Kerala Sales Tax Appellate Tribunal, Additional Bench, Ernakulam dated 15.05.2009 rendered in seven Tax Appeals. The appeals relate to various assessment years, commencing from 2001-2002 to 2004-2005 of the same assessee, i.e. M/s.Harrisons Malayalam Ltd. 2. For the said assessment years, the respondent-assessee filed returns. The assessing authority, on examination of the returns, came to the conclusion that there was a short payment of the tax due with reference to each of the assessment years and, therefore, opined that the assessee is bound not only to pay the balance of the tax, but also to pay interest on such delayed payment of tax. 3. Eventually, the matter reached the Tribunal. The Tribunal S.T.Rev.202 of 2010 & connected cases - 2 - ## directed that - _“With regard to levy of interest we direct the assessing authority to follow the dictum laid down by the Honourable Supreme Court in Maruthi Wire Industries Ltd.'s case (122 STC 410) and the decision of the Honourable High Court of Kerala in P.K.Damodran's case (12 KTR 133)”._ ## 4. The instant revisions are filed challenging the correctness of the said direction, on the ground that the abovementioned decision of this Court reported in (2004) 12 KTR 133 is overruled by a Full Bench decision of this Court in _**State of Kerala v. Western India Cosmetic and Health Products Ltd.**_ [2010 (1) KLT 786]. However, these revisions are filed with a substantial delay of more than 300 days in each of these cases. Therefore, the petitioner-State of Kerala seeks condonation of delay in preferring the revisions in each of the cases. Seven miscellaneous applications are filed praying the condonation of delay. 5. The respondent is served in all these cases. The respondent vehemently contesting the delay condonation petitions. In substance, the objection of the respondent is that the last date of limitation for filing of the instant revisions expired on 27.10.2009. As on S.T.Rev.202 of 2010 & connected cases - 3 - that date, the law laid down by this Court in (2004) 12 KTR 133 was good law, but came to be overruled by the decision in 2010 (1) KLT 786 on 16.12.2009, i.e. some 50 days after the expiry of the period of limitation in each of these cases. The learned counsel for the respondent, therefore, argues that a subsequent judicial declaration laying down the correct position of law of is not a ground for condoning the delay in preferring an appeal or revision. The learned counsel in support of his submission relied on the decision of the Supreme Court in _**Golak Nath v. State of Punjab**_ [AIR 1967 SC 1643]. The learned counsel relied upon certain passages of the judgment of Chief Justice K.Subba Rao dealing with the prospective overruling of the various Constitutional amendments which were in challenge before the Supreme Court. We are of the opinion that the reliance on the said decision is wholly misconceived in the instant case. 6. The learned counsel also relied on the decision reported in _**CIT v. Ramachandra Hatcheries**_ [(2008) 305 ITR 117 (Mad)]. The matter arose under the Income Tax Act. The assessee's tax liability was determined by the assessing authority. Aggrieved by the same, the assessee carried the matter in appeal before the Commissioner of Income Tax Appeals. The appeals were partly allowed. Certain claims S.T.Rev.202 of 2010 & connected cases - 4 - made by the assessee under Sections 80HH and 80-I of the Act were allowed. Pursuant to the appellate order, the assessments were revised. Subsequently, a judgment of the Supreme Court settled the interpretation of Sections 80HH and 80-I of the Income Tax Act which was contrary to the interpretation placed by the appellate authority. The assessing officer issued notice proposing to reopen the assessments. The assessee carried the matter in appeal, eventually before the Income Tax Appellate Tribunal. The Tribunal held that the reopening of the assessment, in the abovementioned circumstances, was bad in law. The High Court affirmed the decision of the Tribunal (relying upon an earlier decision of the High Court in _**Seshasayee Paper and Boards Ltd. v. I.A.C. of I.T.**_ [(1986) 157 ITR 342] and the decision of the Supreme Court in _**CIT v. Rao Thakur Narayan Singh**_ [(1965) 56 ITR 234]) and held that permitting the reopening of the assessments would virtually be enabling the assessing authority to sit in judgment over the decision of the appellate authority and such a course is not permissible in law. If the Revenue is of the opinion that the appeals were wrongly decided, the course open for the Revenue is to challenge the correctness of the decision of the appellate authority before the appropriate higher forum in accordance with law; but not to reopen the S.T.Rev.202 of 2010 & connected cases - 5 - assessment on the ground that the view taken by the appellate authority is not consistent with the law declared subsequently either by the High Court or the Supreme Court. 7. We are in respectful agreement with the principle laid down by the Madras High Court. But, we are of the opinion that the said principle has no application in the present case. In the instant case, the Revenue is only following the principle laid down in the said decision by challenging the correctness of the decision of the appellate Tribunal. If the decision of the Full Bench [2010 (1) KLT 786], what to be in existence either on the date of the impugned judgments or at any time subsequently, but before the expiry of the period of limitation for filing of the instant revisions, there could not have been any objection in law for the State to invoke the Full Bench decision in support of its case. The fact that such judgment was rendered after the period of limitation, in our opinion, would not make any difference to the petition seeking the condonation of delay, if the delay is otherwise properly explained. 8. Another decision relied upon by the learned counsel for the respondent is _**Suresh Babu v. Smt.S.Susheela Thimmegowda**_ [ILR 1998 Kar. 3885]. The matter arose under the Karnataka Rent Control Act. The Act prohibited the eviction of the tenants except in S.T.Rev.202 of 2010 & connected cases - 6 - accordance with the provisions of the Act and by orders of the Tribunal created under the said Act. Under the provisions of the said Act, non-residential buildings in the occupation of tenants paying rent exceeding 500 rupees per month were not governed by the provisions of the Act. In all those cases where the eviction of the tenants of non-residential buildings fetching a rent of more than 500 rupees, the landlords were filing civil suits for eviction of the tenants. However, Section 31 of the Act, which carved out the exception in favour of buildings which fetch a rent of more than 500 rupees, was held to be violative of Article 14 and unconstitutional. The result was that irrespective of the rent fetched by the building, even non-residential building also, fell within the purview of the Act and consequently eviction was only possible by orders of the Tribunal created under the Act, but not by decrees of civil Court. The question arose as to the fate of the decrees passed by the civil Courts, but were pending consideration in appeal before the declaration of the unconstitutionality of Section 31. Dealing with the said question, the Karnataka High Court at para 18 observed as follows: _“A decision rendered by a competent Court becomes final and conclusive when statutory avenues of challenge thereto by way of_ S.T.Rev.202 of 2010 & connected cases - 7 - _appeal, revision, review, rectification or otherwise are availed and exhausted, or not availed within the period prescribed by law and thus becomes unassailable”_ The learned counsel for the respondent laid emphasis on the last part of the above extract and argued that a decision rendered by a competent Court, but not challenged by way of appeal or revision within the period of limitation prescribed under law, becomes unassailable. We regret our inability to accept the submission. We do not dispute the proposition of law laid down in the above decision. But, we are of the opinion that the judgment is an authority for the proposition that an application seeking condonation of delay should be rejected on the principle that the judgment of the competent Court had already attained a finality. Such delay condonation application, in our view, is required to be considered on the basis of the well established principles governing the condonation of delay in preferring the appeals or revisions. 9. Coming to the delay condonation applications on hand, an identical affidavit is filed in all the seven cases. The only point of difference is in the description of the number of days of delay with reference to each of the revisions which, in all cases, is above 300 days. S.T.Rev.202 of 2010 & connected cases - 8 - 10. The impugned common order of the Tribunal is dated 15.05.2009. The same was received by the Joint Commissioner of Law on 29.07.2009. Thereafter for a period of almost one year there was total inaction on the part of the Department. It is only on 24.6.2010 the Joint Commissioner of Law sought the opinion of the Advocate General in the matter and decided to prefer an appeal. There is no explanation for the delay of one year whatsoever. In the circumstances, were are of the opinion that no sufficient cause is shown by the petitioner to condone the delay. Therefore, the applications are dismissed. Consequently, the revision petitions are also dismissed. J. Chelameswar Chief Justice P.R.Ramachandra Menon Judge vku/-