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June 5, 2020

Can assessment orders be passed in the current Covid-19 situation where the SC has extended the period of limitation

Can assessment orders be passed in the current Covid-19 situation where the SC has extended the period of limitation

Introduction

The world is facing a grave situation in the form of COVID 19. The Supreme Court of India in the backdrop of the on-going pandemic has extended the period of limitation. Are assessment orders passed during the pandemic lockdown, where the Supreme Court has extended the period of limitation, justified? Let us understand the same with the help of the case law – Walchandnagar Industries Limited Vs Commercial Tax Officer (Andhra Pradesh).

After extension in the limitation period by Supreme Court, are assessment orders passed during Covid-19 situation justified?

This was made clear in the case of Walchandnagar Industries Limited Vs Commercial Tax Officer (Andhra Pradesh)

Facts of the Case

  1. The petitioner (Walchandnagar Industries Limited), was asked by the respondent to appear before him.
  2.  Petitioner had addressed to the Respondent requesting for exemption to appear because of the pandemic situation.
  3. The petitioner said that they had no opportunity to coordinate with their offices, which were situated in other States
  4. Due to the prevalent COVID 19 pandemic, they could not file reply.
  5. All the requests for adjournment were refused and that the impugned order and the penalty order were also passed without hearing the petitioner.

Order Passed by Supreme Court (SC) extending Period of Limitation

Considering the ongoing COVID Pandemic the SC had passed an order on 23/03/2020 extending period of limitation. Details of the same are given below:-

  1. SC had taken in consideration the difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State).
  2. To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not, shall stand extended w.e.f. 15.03.2020 till further order/s to be passed by this Court in present proceedings.

Understanding Period of Limitation

Relevant section:

According to Section 2 (j) of Limitation Act, 1963, ‘Period of Limitation’ means a period of limitation prescribed for any suit, appeal or application under the schedule to the Limitation Act, which covers a range of claims and their timelines.

Issue of the Case

  1. Request for adjournment for Personal Hearing owing to pandemic situation due to COVID 2019 was denied.
  2. The petitioner stated that the Assessment Order passed by the Respondent under the provisions of the Andhra Pradesh Value Added Tax Act 2005 as illegal, arbitrary, bad in law.
  3. According to the petitioner the order is without jurisdiction and is in violation of principles of natural justice.
  4. SC has extended the period of limitation in all matters and therefore, the apprehension of the respondents was that unless a consequential order is passed, within three years from the date of original order, the same will not be valid.

Proceedings of the Court

  1. The petitioner submitted that this is a matter which has to be remanded and heard afresh, with a personal hearing.
  2. The respondent, stated that there is an effective and alternative remedy available and the writ petition is therefore not maintainable.
  3. Apart from that, he pointed out that more than adequate opportunity has been given to the petitioner to appear and explain their case.
  4. Therefore, the respondent stated that there were no merits in the writ petition and that the same should be rejected, since more than adequate opportunity was given and the petitioner failed to act on the same.
  5. The Court, after hearing both the learned counsel, noticed that all the requests for adjournment from personal appearance etc., were made on the ground that due to the prevalent pandemic situation, the petitioner could not file a detailed reply nor appear in person before the respondent.
  6. This Court also noticed that they have sought time on the ground that they could not access all the records, to prepare their statement of objections.
  7. The existence of an alternative remedy is also not a bar on this Court. The writ in the opinion of this court is maintainable, as the Court opined that there is a failure of the rules of natural justice which entail a ‘fair’ hearing.
  8. A reading of the impugned order showed that it also relates to the period 2014-2015 onwards. Therefore, the Court found sufficient strength in the statement made, that the old records had to be accessed in order to prepare a detailed reply.
  9. This Court also noticed that respondent had also noticed the orders passed by the SC in the ‘taken up’ matters by which limitation was extended for all matters.
  10. Respondent for his own reasons had disagreed with the order passed by the SC.
  11. This Court reminded the respondent that the order passed by SC is binding on all the citizens/Tribunals/Courts of this country, including those exercising quasi-judicial functions.
  12. It appeared that respondent’s understanding of the law as declared by the SC was clearly misconceived.
  13. In these circumstances, without going further into this issue, this Court was of the opinion that the petitioner is entitled to the reliefs as prayed for.

The impugned order and the consequential order were both set aside and the writ petitions were allowed, with the following directions:

  1. Immediately after the pandemic situation eases and the restrictions are lifted on the movement of men and material etc., respondent is directed to issue a notice to the petitioner giving him time of two weeks to appear along with his reply and all his documents.
  2. In view of the fact that the petitioner is aware of the case set up against him, he is directed to use the interim period to prepare his counter and also his objections to the extent possible.
  3. Respondent is therefore, directed to give notice of two weeks, after the Central Government relaxes the lock down in India and fix a suitable date for the appearance of the petitioner and for disposal of the matter.
  4. It is made clear that if the petitioner seeks time or otherwise tries to delay the matter, respondent is at liberty to proceed strictly in accordance with law.

Therefore the order passed by SC is binding on all the citizens/Tribunals/Courts of this country, including those exercising Quasi-Judicial functions. Any Ex-parte orders passed during lockdown, without giving sufficient opportunity of being heard, need to be reviewed and set aside.

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