17 September, 2019
The Querist sought our opinion in relation to the applicability of the provisions of the Limitation Act, 1963.
BACKGROUND –
The Querist is a company under the provisions of the Companies Act, 1956 and is engaged in the business of transportation of valuable goods. A consignment was being transported from Uttarakhand to Rajasthan. The said consignment was stopped by a Mobile Squad and all the goods along with the original documents were detained by the Mobile Squad as the driver of the vehicle was unable to produce the transit pass. A Show Cause Notice was issued by the Assistant Commissioner, Commercial Taxes. A reply was submitted to the aforesaid Show Cause Notice, however same was rejected and a seizure Order was passed by the Court of Assistant Commissioner, Commercial Taxes seizing the entire goods and demanding a cash security @40% of the total value of the goods. An application under proviso to the Section 48(7) of the UP VAT Act 2008 was filed by the Querist against the seizure Order before the Joint Commissioner (SIB), Commercial Taxes. However, the said Appeal was rejected.
The Querist again filed an appeal under Section 57 of the UP VAT Act 2008 before the Hon’ble Commercial Tax Tribunal. The said appeal was partially allowed by the Hon’ble Tribunal and directions were given to release the goods in question after furnishing of the bank guarantee. Both the Querist and Respondent herein filed a Revision petition against the order before the Hon’ble High Court and the Hon’ble High Court ordered the goods to be released on deposit of 1% as a security deposit.
Thereafter, the Assistant Commissioner issued a Notice under Section 54(15) of the UP VAT Act 2008. A detailed reply to the said notice was filed by the Querist.
The Assistant Commissioner held that the Querist was transporting the goods without a transit pass and accordingly levied a maximum penalty of 40% value of the goods.
An Appeal was filed under Section 55 of the UP VAT Act 2008 by the Querist challenging the Order. An Interim Order was passed by the Court of Ld. Assistant Commissioner thereby staying 50 % of the amount of recovery till the final disposal of the Appeal. However, the department in complete violation of the order, attached the bank account of the Querist and recovered the entire amount. Thereafter, the said Appeal was dismissed by Court of Ld. Assistant Commissioner. A Second Appeal was filed by the Querist under the provisions of Section 57 of the UP VAT Act 2008 challenging the Order before the Hon’ble Tribunal, Commercial Tax.
The Second Appeal was allowed in the favour of the Querist and the Hon’ble Tribunal set aside the Order and directed that any amount in excess of the security amount had been charged, same need to be returned as per the provisions of the law.
ISSUESINHAND
As per the agreed terms and conditions of the Agreement executed between the Parties, the Querist did not receive any payment with regard to the delivery of the consignment. What is the legal remedy available with the Querist for the recovery of the money?
Whether the provisions of Limitation Act, 1963 are applicable in the present case?
OPINION
Legal Remedy available with the Appellant for the recovery of money.
The Querist can file a suit for recovery of money under the provisions of Order XXXVII of CPC against the delivery of a consignment as per the agreed terms and conditions of the Agreement executed between the two parties. In the present case, the Querist after complying with the Order of the Hon’ble High Court got the goods released and delivered them to the Party concerned. Thus, there is a clear liability on the part of the other party to make the payment to the Querist as per the terms and conditions of the Agreement.
Application of the provisions of the Limitation Act, 1963
a) In the present case, the cause of action arose when the Querist delivered the goods after the release of confiscated goods in terms of order by the Hon’ble High Court. The period of limitation for filing the suit for recovery of money under Order 37 Code of Civil Procedure Code, 1908 is three years from the date of cause of the action. However, the Querist was not able to file the suit for the recovery of money within the period of limitation as the Querist had been prosecuting with due diligence appeals filed under the provisions of UP VAT Act 2008 against the Orders of Assistant Commissioner (SIB), Commercial Taxes Division. It is pertinent to state herein that it was only in year, that the controversy related to the payment of the penalty imposed under Section 54(1) (15) of the UP VAT Act 2008 got settled and the Hon’ble Tribunal, Moradabad Bench observed that the Querist is not liable to deposit
an amount and the amount already deposited shall be refunded as per the
provisions of law.
b) In view of the Order passed by the Hon’ble Tribunal, the amount deposited by the other party is liable to be refunded and the Querist is entitled to the payment for the delivery of the consignment. Further, the time spent by the Querist in prosecuting the appeals is liable to be excluded as per the provisions of Section 14 of Limitation Act, 1963.
c) In addition to this, Order 7 Rule 6 Code of Civil Procedure Code, 1908 permits the Querist an exemption from limitation where a suit has been instituted after the expiration if the period prescribed by the law of limitation. The Querist has to prove the conditions why he wasn’t able to file the suit within the period of limitation. In the present case, the Querist herein has a bona fide reason for not filing the suit for recovery of money within a period of three years from the date of cause of action as a dispute related to the delivery of goods was already pending adjudication before the various forums. Therefore, the time spent by the Querist in prosecuting the dispute should be excluded in computation of limitation period.
For further information, please contact:
Manoj Kumar, Partner, Hammurabi & Solomon
Manoj.kumar@hammurabisolomon.com
