- (1.) The common question of law for determination in these appeals by special leave is: Whether Section 14 (2) of the Limitation Act, in terms, or, in principle, can be invoked for excluding the time spent in prosecuting an application under Rule 68 (6) of the U. P. Sales Tax Rules for setting aside the order of dismissal of appeal in default, under the U. P. Sales Tax Act, 1948 (for short. the Sales-tax Act) from computation of the period of limitation for filing a revision under that Act
(2.) It arises out of these circumstances: The respondent, M/s. Parson Tools and Plants (hereinafter referred to as the assessee) carries on business at Kanpur The Sales-tax Officer assessed tax for the assessment years, 1958-1959 and 1959-60, on the assessee by two separate orders. The assessee filed appeals against those orders before the Appellate Authority. On May 10, 1963, when the appeals came up for hearing, the assessee was absent. The appeals were, therefore, dismissed in default by virtue of Rule 68 (5) of the U. P. Sales-tax Rules. Sub-rule (6) of Rule 68 provided for setting aside such dismissal and re-admission of the appeal. On the same day (May 10, 1963), the assessee made two applications in accordance with Sub-rule (6) for setting aside the dismissal. During the pendency of those applications, Sub-rule (5) of Rule 68 was declared ultra vires the rulemaking authority by Manchanda, J. Of the High Court who further held that the Appellate-Authority could not dismiss an appeal in default but was bound to decide it on merits even though the appellant be absent. When these applications under Rule 68 (6) came up for hearing, on 20-10-64, the Appellate-Authority dismissed them outright in view of the ruling of Manchanda J. Against the order of dismissal of his appeals, the assessee on 16-12-1964 filed two revision petitions under Section 10 of the Sales-tax Act, before the Revisional Authority (Judge (Revisions) Sales-tax). These revision petitions having been filed more than 18 months after the dismissal of the appeals, - which was the maximum period of limitation prescribed by sub-sec. (3) of Section 10 - were prima facie timebarred. They were however, accompanied by two applications in which the assessee prayed for exclusion of the time spent by him in prosecuting the abortive proceedings under Rule 68 (6) for setting aside the dismissal of his appeals. The Revisional Authority found that the assessee had been pursuing his remedy under Rule 68 (6) with due diligence and in good faith. It therefore excluded the time spent in those proceedings from computation of limitation by applying S. 14, Limitation Act and in consequence, held that the revision petitions were within time. On the motion of the Commissioner of Sales-tax, the Revisional Authority made two references under Section 11 (l) of the Sales-tax Act to the High Court for answering the following question of law: "Whether under the circumstances of the case, Section 14 of the Limitation Act extended the period for filing of the revisions by the time during which the restoration applications remained pending as being prosecuted bona fide."
(3.) The references were heard by a Full Bench of three learned Judges, each of whom wrote a separate Judgment. Dwivedi J. with whom Singh J. agreed after reframing the question held "that the time spent in prosecuting the application for setting aside the order of dismissal of appeals in default can be excluded from computing the period of limitation for filing the revision by the application of the principle underlying S. 14 (2), Limitation Act.";