The present appeal is preferred by the assessee under section 78 of the Gujarat Value Added Tax Act, 2005 against common order dated 28.07.2009 of the Gujarat Value Added Tax Tribunal, Ahmedabad in Second Appeals No.379 of 2009 to 381 of 2009, and corresponding common order dated 31.08.2009 in Rectification Applications. The three appeals and applications before the Tribunal were in respect of the assessment period 2002-03, 2003-04 and for the period from 01.04.2004 to 18.05.2004. The present appeal challenges the common order in so far as it relates to Appeal No.381 of 2009 and order in Rectification Application No.106 of 2009, for the assessment period 2004-05. 2. Heard learned advocate Mr. Bhargav Karia for the appellant and learned Assistant Govt. Pleader Mr. Kabir Hathi for the respondent authorities, who appeared pursuant to notice issued by this Court.
2.1 Admit. With the consent of learned advocates of both the sides, the appeal is taken up for final hearing today itself.
3. In the facts of the case, following substantial question of law arise for consideration and determination of this Court in the present appeal.
“Whether in the facts and circumstances of the case, the Tribunal committed an error in not condoning the delay in preferring the appeal by the assessee?”
4. The relevant facts are that the appellant was carrying on the business of resale of chemicals. He used to purchase goods from registered dealers within the State of Gujarat and used to sell the same within the State. On 18.05.2004, a search was conducted by officers of the Sales Tax Department at the premises of the appellant. According to the department, in that search it was found that the assessee had purchased goods from the dealers situated outside Gujarat. A show-cause notice therefore was issued resulting into an an ex-parte assessment order dated 28.03.2005 passed by respondent No.2 for the year 2002-03, 2003-04 and 2004-05 raising the demand of tax, interest and penalty as per the following details.
4.1 The aggrieved appellant preferred appeals for all the three years before the Dy. Sales Tax Commissioner (Appeals). The appeals came to be dismissed due to absence of the appellant and his consequent failure to deposit the amount required to be deposited for hearing of the appeal. It was the case of the appellant that soon after filing of the appeal, he had to close down his business and had to go to his native place because of illness of his mother.
4.2 Having later came to know about the dismissal of the appeals, the appellant preferred second appeal before the Tribunal, which could be filed only after the period of limitation was over. Therefore, application for condonation of delay, which was of 19 months and 22 days, was also filed. The Tribunal by common judgment dated 28.07.2009 refused to condone the delay and dismissed the appeals. Thereafter, the appellant preferred rectification applications, which too came to be dismissed.
4.3 Learned advocate for the appellant submitted that the assessee had genuine cause of illness of his mother on account of which the delay had occasioned. He submitted that the appellant had also filed an affidavit dated 15.07.2009 before the Tribunal to explain the cause of delay. He further submitted that the refusal on part of the Tribunal to condone the delay was based on assumptions and presumptions. He submitted that there was sufficient cause for condonation of delay which ought to have been accepted. It was submitted that not only the delay was not condoned despite sufficient reasons, the Tribunal further erred in making observations on merits of the case.
4.4 As against that the learned Assistant Govt. Pleader contended that the Tribunal was justified in not condoning the delay. According to him, the delay of 19 months was inordinate without any good reasons. He submitted that the explanation given by the assessee for delay was not convincing. He, therefore, requested to dismiss the appeal.
5. It was appellant's case that after the ex-parte assessment orders, his appeals preferred on 01.06.2005 before the Appellate Commissioner, came to be dismissed in his absence and failure to deposit the amount and he knew about that fact only when he returned to Ahmedabad on 20.06.2009. Appellant’s appeals preferred before the Tribunal against that got delayed in the process, therefore, the delay occasioned.
5.1 In not accepting the ground for condonation, the Tribunal reasoned as under.
“It is unlikely that such surprise visit and admissions in his statement coincided with closure of business on account of financial and mental problems of the appellant and sickness of mother of the appellant, as a result of which he had to close his business and move to his native place outside the state to take care of the health of his ailing mother”
5.2 The above reasoning adopted by the Tribunal is based on a conjecture. The inference of the Tribunal that it was unlikely that the visit of the officers and the illness of the mother of the appellant coincided, was a bare supposition. It was not a rational inference. In Trishala Jain Vs. State of Uttaranchal [(2011) 6 SCC 47], the Supreme Court observed that the word `conjecture' means that it is an estimation which is made with very slight amount of knowledge, which is just sufficient to incline the scale of probability. It was presumptive and illogical to link the two events namely of illness of appellant's mother and the checking by the officers, when there was no factual or even inferential basis available to connect the both. Thereafter, it was a conjecture or supposition on the footing of which cause for delay was disbelieved by the Tribunal.
5.3 As to the sufficiency of the cause shown by the appellant, the reason advanced for being not able to prefer appeal in time was that he had closed down his business and had rushed to his native place which was a village outside Gujarat, on account of his mother falling sick. The appellant had filed an affidavit dated 15.07.2007 setting out the aforesaid facts on oath and it was further submitted that due to his mother’s sickness, he was disturbed and was facing financial problems. The appellant had been running a proprietary firm. There was nothing on record to infer that the reason given by the appellant was not bonafide. In the facts of the case, it constituted a sufficient cause.
5.4 The Tribunal not only failed to apply its mind to the cause pleaded for delay, but as stated above, rejected the same on the basis of a conjecture. Where the facts pleaded could establish a cause, sufficiency thereof ought to have been examined by the Tribunal and could not have been discarded on the basis of mere supposition.
5.5. Furthermore, on going through the order of the Tribunal, it was noticed that observations were made on the aspect of merits of the case. In considering whether the appellant had made out case for condonation of delay, the Tribunal could not have coloured its reasoning by observations on merits. The entire approach was erroneous and misdirected. The Tribunal failed to focus and consider that a sufficient cause was made out.
6. In light of the above discussions and reasons, the question formulated is answered in affirmative in favour of the appellant. It is held that the Tribunal committed an error in not condoning delay in preferring the appeal by the assessee. The Tribunal, now therefore, shall hear and decide the main appeal of the assessee in accordance with law and procedure.
7. For the aforesaid reasons, the appeal is allowed.
(V.M. SAHAI, J.) (N.V. ANJARIA, J.)
(SN DEVU PPS)