M.P. Steel Corporation vs. Commissioner of Central Excise (23.04.2015 - SC)

MANU/SC/0484/2015
Equivalent/Neutral Citation: 2015VI AD (S.C .) 501, 2015 (2) C C C 133 , 2015(II)C LR(SC )3, 2015(319)ELT373(S.C .), [2015]32GSTR260(SC ),
2015/INSC /346, 2015(3)KLJ147, 2015(3)KLJ155, 2015(2)KLT996, 2016(1)MhLJ505(SC ), (2015)4MLJ225, 2016(1)MPLJ279, 2015(3)RC R(C ivil)965,
2015(5)SC ALE505, (2015)7SC C 58, 2015 (7) SC J 218, [2015]7SC R291, 2017[50]S.T.R.205(S.C .), (2015)80VST402(SC ), (2015)4WBLR(SC )406
IN THE SUPREME COURT OF INDIA

Civil Appeal No. 4367 of 2004
Decided On: 23.04.2015
M.P. Steel Corporation Vs. Commissioner of Central Excise
Hon'ble Judges/Coram:
A.K. Sikri and Rohinton Fali Nariman, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: K.V. Vishwanathan, Sr. Adv., B. Raghunath, Gautam
Bhardwaj, Abhishek Kaushik, Mehul M. Gupta, Adeeba Mujahid and S.R. Setia, Advs.
For Respondents/Defendant: A.K. Sanghi, Sr. Adv., Sunita Rani Singh, Ritesh Kumar and
B. Krishna Prasad, Advs.
Case Category:
INDIRECT TAXES MATTERS - INTERPRETATION OF CENTRAL EXCISE ACT AND THE
RULES
JUDGMENT
Rohinton Fali Nariman, J.
1. The facts giving rise to the present appeal are as follows. The Appellant is engaged
in ship breaking activity at Alang Ship Breaking Yard. The Appellant imported a vessel,
namely, M.V. Olinda, for the purpose of breaking the same, and filed a Bill of Entry
when the vessel was imported on 7.2.1992. It declared in the said Bill of Entry that the
Light Displacement Tonnage of the vessel was 7009 metric tons. On 19.2.1992, the
Appellant was informed by the Superintendent of Customs and Central Excise Alang that
the Light Displacement Tonnage of the ship is actually 8570 tons and that customs duty
was to be levied on this tonnage. On 3.3.1992, the Appellant cleared the vessel on
payment of customs duty on the basis of 7009 metric tons and executed a bank
guarantee for Rs. 19,90,275/- being the difference in customs duty on 1561 metric
tons. On 25.3.1992, the Collector of Customs, Rajkot, directed the Assistant Collector,
Bhavnagar to encash the bank guarantee furnished by the Appellant. On 2.4.1992, the
Superintendent of Customs and Central Excise sent a letter to the Appellant
communicating the decision of the Collector, as aforesaid. The bank guarantee was duly
encashed on 3.4.1992. After protesting against the said illegal action of the Department
in encashing the bank guarantee, the Appellant preferred an appeal against the
Superintendent's letter dated 2.4.1992 and the Collector's order dated 25.3.1992 before
CEGAT. On 23.6.1998, the Appellate Tribunal allowed the appeal and set aside the order
of the Collector dated 25.3.1992. In the year 2000, the Department preferred an appeal
before this Court. On 12.3.2003, this Court allowed the appeal holding:
This appeal is against a judgment dated 23.6.1998 passed by the Customs,
Excise And Gold (Control) Appellate Tribunal, West Regional Bench at Mumbai.
02-12-2023 (Page 1 of 30) www.manupatra.com Gujarat National Law University

Facts briefly stated are that the Respondent filed a Bill of Entry in respect of
ship M.V. Olinda imported by them for purposes of breaking. The Respondent
showed the light displacement tonnage (LDT) as 7009 metric tons. This
declaration was not accepted by the Superintendent of Customs and Central
Excise. The Respondent, thus, approached the Assistant Collector. The question
was how LDT was to be calculated. It appears that between the Assistant
Collector and the Collector there was some internal correspondence on this
aspect. The Collector took a policy decision on how LDT was to be calculated.
The Collector conveyed this decision to the Assistant Collector by his letter
dated 25.3.1992. Pursuant thereto the Superintendent of Customs and Central
Excise passed an order dated 2nd April, 1992 in respect of vessel M.V. "Olinda".
of course the order dated 2nd April, 1992 is based on the decision of the
Collector. However, the order remains that of the Superintendent of Customs
and Central Excise.
The Respondent filed an appeal directly before CEGAT. CEGAT has disposed of
this appeal by the impugned order. CEGAT negatived a contention that the
appeal was not maintainable before them on the basis that the Superintendent's
order is nothing more than a communication of the order passed by the
Collector (Appeals). CEGAT held that the appeal was in fact against the
Collector's order.
In our view, the reasoning of CEGAT cannot be sustained. The decision taken
by the Collector was not taken in his capacity as Collector (Appeals). Also the
order by which Respondent is aggrieved is the order passed by the
Superintendent. An appeal against that order has to be filed before the
Commissioner (Appeals) Under Section 128. By virtue of Section 129-A, CEGAT
has no jurisdiction to entertain such an appeal.
It is clear that the impugned order is passed without any jurisdiction.
Therefore, it cannot be sustained. We, thus, set aside the order. The appeal is
accordingly allowed. There will be no order as to costs.
We clarify that we have not gone into the merits of the matter and that it will be
open to the Respondent to adopt such remedy as they may be advised, if in law
they are entitled to do so.
2 . After this judgment, on 23.5.2003, the Appellant filed an appeal before the
Commissioner (Appeals) against the order passed by the Superintendent, Customs
dated 2.4.1992. On 4.8.2003, an application to condone delay in filing the appeal was
made in the following terms:
As appeal against the order of the Supdt. of Customs was filed by us within 60
days of the receipt of the certified true copy of the judgment of the Hon'ble
Supreme Court. It is our respectful submission that since the appeal was filed
by us before the correct forum with due dispatch after receipt of the Supreme
Court's judgment, there has been no delay in filing the appeal. It is well settled
now that the time taken for pursuing a remedy before another appellate Forum
is to be excluded for the purpose of computing the period for filing an appeal.
(Union Carbide India Ltd. v. CC MANU/CK/0195/1998 : 1998 (77) ECR 376,
Karnataka Minerals and Mfg. Co. Ltd. v. CCE MANU/CC/0186/1996 : 1998 (101)
ELT 627).

3 . By an order dated 27.10.2003, the Commissioner of Customs (Appeals) dismissed
the appeal on the ground of delay stating that the appeal had been filed way beyond the
period of 60 days plus 30 days provided for in Section 128 of the Customs Act. Against
this order, CESTAT dismissed the appeal of the Appellant stating that the Commissioner
(Appeals) had no power to condone delay beyond the period specified in Section 128.
4 . Shri Viswanathan, learned senior advocate appearing on behalf of the Appellant
argued before us that the entire period starting from 25.3.1992 up till 12.3.2003 ought
to be excluded by applying Section 14 of the Limitation Act. According to him, Section
14 of the Limitation Act would apply to exclude this period from the period of 90 days
allowed in filing an appeal filed to the Collector (Appeals) inasmuch as vide Section
29(2) of the Limitation Act Section 14 of the Limitation Act would also apply to
Tribunals set up under special or local Acts. According to him, the entire period with
which he was prosecuting, with due diligence, the abortive appeal filed before CEGAT
should be excluded, which would include the period even prior to 22.6.1992 when the
abortive appeal was filed. As an alternative submission, on the assumption that Section
14 applied only to Courts and not to Tribunals, he submitted that the principle of
Section 14 would then apply. According to him, Section 128 of the Customs Act before
its amendment in 2001 would be attracted on the facts of this case giving him a period
of 90 days plus an extended period of a further period of 90 days within which the
present appeal could be filed. This being the case, on an application of Section 14, the
appeal would be filed with no delay at all even if the period from 3.4.1992 to 22.6.1992
and 12.3.2003 to 23.5.2003 is to be taken into account, as that would be less than 180
days given to file the appeal under the old Section 128. He cited a number of authorities
which we will deal with in the course of this judgment in support of all the aforesaid
propositions.
5 . Shri A.K. Sanghi, learned senior advocate appearing on behalf of the Department
argued that Section 128 of the Customs Act excluded the application of Section 14 of
the Limitation Act in that the scheme of the Section is that only a limited period should
be given to an Assessee beyond which the appeal would become time barred. In the
present case, Section 128 as amended post 2001 would apply to the facts of this case
and on the Appellant's own showing the appeal is out of time by eleven and a half
years. Section 128 only gives the Appellant 60 days plus another 30 days which have
long gone. He also argued that Section 14 of the Limitation Act would not apply to
Tribunals but only to Courts, and the Collector (Appeals) was at best a quasi-judicial
Tribunal. Further, according to him, no question of any principle of Section 14 would
get attracted. In fact, according to him, there is no pleading qua Section 14 at all - the
only pleading is for condonation of delay and not for exclusion of time. Section 14
requires that five necessary ingredients must be satisfied on facts before it can be
attracted. The Appellant has neither pleaded nor proved any of these ingredients. He
also cited a number of authorities which we will refer to in the course of this judgment.
Ingredients of Section 14.
Section 14 of the Limitation Act reads as follows:
14. Exclusion of time of proceeding bona fide in court without
jurisdiction.--(1) In computing the period of limitation for any suit the time
during which the Plaintiff has been prosecuting with due diligence another civil
proceeding, whether in a court of first instance or of appeal or revision, against
the Defendant shall be excluded, where the proceeding relates to the same
matter in issue and is prosecuted in good faith in a court which, from defect of

jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during
which the applicant has been prosecuting with due diligence another civil
proceeding, whether in a court of first instance or of appeal or revision, against
the same party for the same relief shall be excluded, where such proceeding is
prosecuted in good faith in a court which, from defect of jurisdiction or other
cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in Rule 2 of Order XXIII of the Code of
Civil Procedure, 1908 (5 of 1908), the provisions of Sub-section (1) shall apply
in relation to a fresh suit instituted on permission granted by the court Under
Rule 1 of that Order, where such permission is granted on the ground that the
first suit must fail by reason of a defect in the jurisdiction of the court or other
cause of a like nature.
Explanation.--For the purposes of this section,--
(a) in excluding the time during which a former civil proceeding was
pending, the day on which that proceeding was instituted and the day
on which it ended shall both be counted;
(b) a Plaintiff or an applicant resisting an appeal shall be deemed to be
prosecuting a proceeding;
(c) misjoinder of parties or of causes of action shall be deemed to be a
cause of a like nature with defect of jurisdiction.
6. Shri A.K. Sanghi, learned senior Counsel appearing on behalf of the Department has
stated that at no point of time has the Appellant taken up a plea based on Section 14.
Neither has the Appellant met with any of the five conditions set out in paragraph 21 of
Consolidated Engg. Enterprises v. Principal secy., Irrigation Deptt.
MANU/SC/7460/2008 : (2008) 7 SCC 169, which reads as follows:
21. Section 14 of the Limitation Act deals with exclusion of time of proceeding
bona fide in a court without jurisdiction. On analysis of the said section, it
becomes evident that the following conditions must be satisfied before Section
14 can be pressed into service:
(1) Both the prior and subsequent proceedings are civil proceedings
prosecuted by the same party;
(2) The prior proceeding had been prosecuted with due diligence and in
good faith;
(3) The failure of the prior proceeding was due to defect of jurisdiction
or other cause of like nature;
(4) The earlier proceeding and the latter proceeding must relate to the
same matter in issue and;
(5) Both the proceedings are in a court.
7 . Technically speaking, Shri A.K. Sanghi, may be correct. However, in an application
for condonation of delay the Appellant pointed out that they were pursuing a remedy

before another appellate forum which ought to be excluded. We deem this averment
sufficient for the Appellant to contend that Section 14 of the Limitation Act or principles
laid down under it would be attracted to the facts of this case.
We might also point out that conditions 1 to 4 mentioned in the Consolidated
Engineering case have, in fact, been met by the Appellant. It is clear that both the prior
and subsequent proceedings are civil proceedings prosecuted by the same party. The
prior proceeding had been prosecuted with due diligence and in good faith, as has been
explained in Consolidated Engineering itself. These phrases only mean that the party
who invokes Section 14 should not be guilty of negligence, lapse or inaction. Further,
there should be no pretended mistake intentionally made with a view to delaying the
proceedings or harassing the opposite party. On the facts of this case, as the earlier
Supreme Court order dated 12.3.2003 itself points out, there was some confusion as to
whether what was appealed against was the Superintendent's order or the Collector's
order. The Appellant bona fide believed that it was the Collector's order which was
appealed against and hence an appeal to CEGAT would be maintainable. This
contention, however, ran into rough weather in this Court. Further, the time taken
between 3.4.1992 and 22.6.1992 to file an appeal cannot be said to be inordinately
long. Thus, neither was there any negligence, lapse or inaction on facts nor did the
Appellant delay proceedings to harass the Department by pretending that there was a
mistake. Condition (3) was also directly met - this Court in the order dated 12.3.2003
set aside CEGAT's order on the ground that it was without jurisdiction. It is indisputable
that the earlier proceeding and the later proceeding relate to the same matter in issue
and thus condition 4 is also met. Condition 5, however, has not been met as both the
proceedings are before a quasi-judicial Tribunal and not in a Court. This, however, is
not fatal to the present proceeding as what is being held by us in this judgment is that
despite the fact that Section 14 of the Limitation Act may not apply, yet the principles of
Section 14 will get attracted to the facts of the present case. It is in this way that we
now proceed to consider the law on the subject.
Whether the Limitation Act applies only to Courts and not to Tribunals
8. A perusal of the Limitation Act, 1963 would show that the bar of limitation contained
in the Schedule to the Act applies to suits, appeals, and applications. "Suit" is defined
in Section 2(I) as not including an appeal or an application. The word "Court" is not
defined under the Act. However, it appears in a number of its provisions (See: Sections
4, 5, 13, 17(2), 21). A perusal of the Schedule would show that it is divided into three
divisions. The first division concerns itself with suits. Articles 1 to 113 all deal with
"suits".
9 . Sections 2(a), (e) and (i) are material in that they define what is meant by an
applicant, a Plaintiff and a Defendant.
2. Definitions.--In this Act, unless the context otherwise requires,--
(a) "applicant" includes--
(i) a Petitioner;
(ii) any person from or through whom an applicant derives his
right to apply;
(iii) any person whose estate is represented by the applicant as
executor, administrator or other representative;

(e) "Defendant" includes--
(i) any person from or through whom a Defendant derives his
liability to be sued;
(ii) any person whose estate is represented by the Defendant
as executor, administrator or other representative;
(i) "Plaintiff" includes-
(i) any person from or through whom a Plaintiff derives his
right to sue;
(ii) any person whose estate is represented by the Plaintiff as
executor, administrator or other representative;
10. Section 3(2) which is material states as follows:
3(2) For the purposes of this Act-
(a) A suit is instituted-
(i) In an ordinary case, when the plaint is presented to the
proper officer;
(ii) In the case of a pauper, when his application for leave to
sue as a pauper is made; and
(iii) In the case of a claim against a company which is being
wound up by the court, when the claimant first sends in his
claim to the official liquidator;
(b) Any claim by way of a set off or a counter claim, shall be treated as
a separate suit and shall be deemed to have been instituted-
(i) in the case of a set off, on the same date as the suit in
which the set off is pleaded;
(ii) in the case of a counter claim, on the date on which the
counter claim is made in court;
(c) an application by notice of motion in a High Court is made when the
application is presented to the proper officer of that court.
11. A perusal of Section 3(2) shows that "suits" are understood as actions begun in
courts of law established under the Constitution of India.
12. In the Schedule, the second division concerns itself with appeals. These appeals
Under Articles 114 to 117, are either under the Code of Civil Procedure, the Code of
Criminal Procedure, or intra-court appeals so far as the High Courts are concerned.
These appeals again are only to "Courts" established under the Constitution.
13. Equally, in the third division, all applications that are referred to are Under Articles
118 to 137 only to "Courts", either under the Code of Civil Procedure or under other
enactments.

1 4 . Sections 13, 21 and Articles 124, 130 and 131 of the Limitation Act are again
important in understanding what is meant by the expression "Court". They are set out
below:
13. Exclusion of time in cases where leave to sue or appeal as a
pauper is applied for.--In computing the period of limitation prescribed for
any suit or appeal in any case where an application for leave to sue or appeal
as a pauper has been made and rejected, the time during which the applicant
has been prosecuting in good faith his application for such leave shall be
excluded, and the court may, on payment of the court fees prescribed for such
suit or appeal, treat the suit or appeal as having the same force and effect as if
the court fees had been paid in the first instance.
2 1 . Effect of substituting or adding new Plaintiff or Defendant.--(1)
Where after the institution of a suit, a new Plaintiff or Defendant is substituted
or added, the suit shall, as regards him, be deemed to have been instituted
when he was so made a party:
Provided that where the court is satisfied that the omission to include a
new Plaintiff or Defendant was due to a mistake made in good faith it
may direct that the suit as regards such Plaintiff or Defendant shall be
deemed to have been instituted on any earlier date.
(2) Nothing in Sub-section (1) shall apply to a case where a party is added or
substituted owing to assignment or devolution of any interest during the
pendency of a suit or where a Plaintiff is made a Defendant or a Defendant is
made a Plaintiff.
It will be seen that suits and appeals that are covered by the Limitation Act are so
covered provided court fees prescribed for such suits or appeals are paid. Under Section
13, set out hereinabove, this becomes clear. That is why time is excluded in cases
where leave to file a suit or an appeal as a pauper is granted in the circumstances
mentioned in the Section. 'Courts' that are mentioned in this Section are therefore
courts as understood in the strict sense of being part of the Judicial Branch of the State.
15. Section 21 also makes it clear that the suit that the Limitation Act speaks of is
instituted only by a Plaintiff against a Defendant. Both Plaintiff and Defendant have been

defined as including persons through whom they derive their right to sue and include
persons whose estate is represented by persons such as executors, administrators or
other representatives. This again refers only to suits filed in courts as is understood by
the Code of Civil Procedure. In this regard, Section 26 of the Code of Civil Procedure
states:
Section 26- Institution of suits
(1) Every suit shall be instituted by the presentation of a plaint or in such other
manner as may be prescribed.
(2) In every plaint, facts shall be proved by affidavit.
16. When it comes to applications, again Articles 124, 130 and 131 throw a great deal
of light. Only review of judgments by a "court" is contemplated in the Third Division in
the Schedule. Further, leave to appeal as a pauper again can be made either to the High
Court or only to any other court vide Article 130. And by Article 131, a revision petition
filed only before Courts under the Code of Civil Procedure or the Code of Criminal
Procedure are referred to. On a plain reading of the provisions of the Limitation Act, it
becomes clear that suits, appeals and applications are only to be considered (from the
limitation point of view) if they are filed in courts and not in quasi-judicial bodies.
17. Now to the case law. A number of decisions have established that the Limitation Act
applies only to courts and not to Tribunals. The distinction between courts and quasi-
judicial decisions is succinctly brought out in Bharat Bank Ltd. v. Employees of
Bharat Bank Ltd. MANU/SC/0030/1950 : 1950 SCR 459. This root authority has been
followed in a catena of judgments. This judgment refers to a decision of the King's
Bench in Cooper v. Wilson. The relevant quotation from the said judgment is as
follows:
A true judicial decision presupposes an existing dispute between two or more
parties, and then involves four requisites: (1) The presentation (not necessarily
orally) of their case by the parties to the dispute; (2) if the dispute between
them is a question of fact, the ascertainment of the fact by means of evidence
adduced by the parties to the dispute and often with the assistance of argument
by or on behalf of the parties on the evidence; (3) if the dispute between them
is a question of law, the submission of legal argument by the parties, and (4) a
decision which disposes of the whole matter by a finding upon the facts in
dispute and application of the law of the land to the facts so found, including
where required a ruling upon any disputed question of law. A quasi-judicial
decision equally presupposes an existing dispute between two or more parties
and involves (1) and (2), but does not necessarily involve (3) and never
involves (4). The place of (4) is in fact taken by administrative action, the
character of which is determined by the Minister's free choice.
18. Under our constitutional scheme of things, the judiciary is dealt with in Chapter IV
of Part V and Chapter V of Part VI. Chapter IV of Part V deals with the Supreme Court
and Chapter V of Part VI deals with the High Courts and courts subordinate thereto.
When the Constitution uses the expression "court", it refers to this Court system. As
opposed to this Court system is a system of quasi-judicial bodies called Tribunals.
Thus, Articles 136 and 227 refer to "courts" as distinct from "tribunals". The question in
this case is whether the Limitation Act extends beyond the court system mentioned
above and embraces within its scope quasi-judicial bodies as well.

19. A series of decisions of this Court have clearly held that the Limitation Act applies
only to courts and does not apply to quasi-judicial bodies. Thus, in Town Municipal
Council, Athani v. Presiding Officer, Labour Court MANU/SC/0331/1969 : (1969) 1
SCC 873, a question arose as to what applications are covered Under Article 137 of the
Schedule to the Limitation Act. It was argued that an application made under the
Industrial Disputes Act to a Labour Court was covered by the said Article. This Court
negatived the said plea in the following terms:
12. This point, in our opinion, may be looked at from another angle also. When
this Court earlier held that all the articles in the third division to the schedule,
including Article 181 of the Limitation Act of 1908, governed applications under
the Code of Civil Procedure only, it clearly implied that the applications must be
presented to a court governed by the Code of Civil Procedure. Even the
applications under the Arbitration Act that were included within the third
division by amendment of Articles 158 and 178 were to be presented to courts
whose proceedings were governed by the Code of Civil Procedure. As best, the
further amendment now made enlarges the scope of the third division of the
schedule so as also to include some applications presented to courts governed
by the Code of Criminal Procedure. One factor at least remains constant and
that is that the applications must be to courts to be governed by the articles in
this division. The scope of the various articles in this division cannot be held to
have been so enlarged as to include within them applications to bodies other
than courts, such as a quasi judicial tribunal, or even an executive authority. An
Industrial Tribunal or a Labour Court dealing with applications or references
under the Act are not courts and they are in no way governed either by the
Code of Civil Procedure or the Code of Criminal Procedure. We cannot,
therefore, accept the submission made that this article will apply even to
applications made to an Industrial Tribunal or a Labour Court. The alterations
made in the article and in the new Act cannot, in our opinion, justify the
interpretation that even applications presented to bodies, other than courts, are
now to be governed for purposes of limitation by Article 137.
Similarly, in Nityananda, M. Joshi and Ors. v. Life Insurance Corporation and
Ors. MANU/SC/0320/1969 : (1969) 2 SCC 199, this Court followed the judgment in
Athani's case and turned down a plea that an application made to a Labour Court would
be covered Under Article 137 of the Limitation Act. This Court emphatically stated that
Article 137 only contemplates applications to courts in the following terms:
3 . In our view Article 137 only contemplates applications to Courts. In the
Third Division of the Schedule to the Limitation Act, 1963 all the other
applications mentioned in the various articles are applications filed in a court.
Further Section 4 of the Limitation Act, 1963, provides for the contingency
when the prescribed period for any application expires on a holiday and the
only contingency contemplated is "when the court is closed." Again Under
Section 5 it is only a court which is enabled to admit an application after the
prescribed period has expired if the court is satisfied that the applicant had
sufficient cause for not preferring the application. It seems to us that the
scheme of the Indian Limitation Act is that it only deals with applications to
courts, and that the Labour Court is not a court within the Indian Limitation Act,
1963.'
20. In Kerala State Electricity Board v. T.P. Kunhaliumma MANU/SC/0323/1976 :
(1976) 4 SCC 634, a 3-Judge Bench of this Court followed the aforesaid two judgments

and stated:
22. The conclusion we reach is that Article 137 of the 1963 Limitation Act will
apply to any petition or application filed under any Act to a civil court. With
respect we differ from the view taken by the two-judge bench of this Court in
Athani Municipal Council case [MANU/SC/0331/1969 : (1969) 1 SCC 873 :
(1970) 1 SCR 51] and hold that Article 137 of the 1963 Limitation Act is not
confined to applications contemplated by or under the Code of Civil Procedure.
The petition in the present case was to the District Judge as a court. The
petition was one contemplated by the Telegraph Act for judicial decision. The
petition is an application falling within the scope of Article 137 of the 1963
Limitation Act.
This judgment is an authoritative pronouncement by a 3-Judge Bench that the
Limitation Act applies only to courts and not to quasi-judicial Tribunals. Athani's case
was dissented from on a different proposition - that Article 137 is not confined to
applications under the Code of Civil Procedure alone. So long as an application is made
under any statute to a Civil Court, such application will be covered by Article 137 of the
Limitation Act.
21. The stage is now set for a decision on which wide ranging arguments were made by
counsel on both sides. In Commissioner of Sales Tax, U.P., Lucknow v. Parson
Tools and Plants, Kanpur MANU/SC/0449/1975 : (1975) 4 SCC 22, a 3-Judge Bench
was confronted with whether Section 14 of the Limitation Act applied to the Sales Tax
authorities under the U.P. Sales Tax Act. In no uncertain terms, this Court held:
8 . Mr. Karkhanis is right that this matter is no longer res Integra. In Shrimati
Ujjam Bai v. State of U.P. [MANU/SC/0101/1961 : AIR 1962 SC 1621 : (1963)
1 SCR 778] Hidayatullah, J. (as he then was) speaking for the Court, observed:
The Taxing authorities are instrumentalities of the State. They are not a
part of the legislature, nor are they a part of the Judiciary. Their
functions are the assessment and collection of taxes and in the process
of assessing taxes, they follow a pattern of action which is considered
judicial. They are not thereby converted into courts of civil judicature.
They still remain the instrumentalities of the State and are within the
definition of 'State' in Article 12.
9 . The above observations were quoted with approval by this Court in
Jagannath Prasad case [MANU/SC/0405/1962 : AIR 1963 SC 416 : (1963) 2
SCR 850 : 14 STC 536] and it was held that a Sales Tax Officer under U.P.
Sales Tax Act, 1948 was not a court within the meaning of Section 195 of the
Code of Criminal Procedure although he is required to perform certain quasi-
judicial functions. The decision in Jagannath Prasad case it seems, was not
brought to the notice of the High Court. In view of these pronouncements of
this Court, there is no room for argument that the Appellate Authority and the
Judge (Revisions) Sales tax exercising jurisdiction under the Sales Tax Act, are
"courts". They are merely Administrative Tribunals and "not courts". Section 14,
Limitation Act, therefore, does not, in terms apply to proceedings before such
tribunals.
It then went on to discuss whether the general principle underlying Section 14 would be
applicable and held:

12. Three features of the scheme of the above provision are noteworthy. The
first is that no limitation has been prescribed for the suo motu exercise of its
jurisdiction by the revising authority. The second is that the period of one year
prescribed as limitation for filing an application for revision by the aggrieved
party is unusually long. The third is that the revising authority has no discretion
to extend this period beyond a further period of six months, even on sufficient
cause shown. As rightly pointed out in the minority judgment of the High Court,
pendency of proceedings of the nature contemplated by Section 14(2) of the
Limitation Act, may amount to a sufficient cause for condoning the delay and
extending the limitation for filing a revision application, but Section 10(3-B) of
the Sales Tax Act gives no jurisdiction to the revising authority to extend the
limitation, even in such a case, for a further period of more than six months.
1 3 . The three stark features of the scheme and language of the above
provision, unmistakably show that the legislature has deliberately excluded the
application of the principles underlying Sections 5 and 14 of the Limitation Act,
except to the extent and in the truncated form embodied in Sub-section (3-B)
of Section 10 of the Sales Tax Act. Delay in disposal of revenue matters
adversely affects the steady inflow of revenues and the financial stability of the
State. Section 10 is therefore designed to ensure speedy and final
determination of fiscal matters within a reasonably certain time-schedule.
1 4 . It cannot be said that by excluding the unrestricted application of the
principles of Sections 5 and 14 of the Limitation Act, the legislature has made
the provisions of Section 10 unduly oppressive. In most cases, the discretion to
extend limitation, on sufficient cause being shown for a further period of six
months only, given by Sub-section (3-B) would be enough to afford relief.
Cases are no doubt conceivable where an aggrieved party, despite sufficient
cause, is unable to make an application for revision within this maximum period
of 18 months. Such harsh cases would be rare. Even in such exceptional cases
of extreme hardship, the revising authority may, on its own motion, entertain
revision and grant relief.
22. It is clear that this judgment clearly laid down two things - one that authorities
under the Sales Tax Act are not "courts" and thus, the Limitation Act will not apply to
them. It also laid down that the language of Section 10(3-B) of the U.P. Sales Tax Act
made it clear that an unusually long period of limitation had been given for filing a
revision application and therefore said that the said Section as construed by the Court
would not be unduly oppressive. Most cases would, according to the Court, be filed
within a maximum period of 18 months but even in cases, rare as they are, filed beyond
such period, the revising authority may on its own motion entertain the revision and
grant relief. Given the three features of the U.P. Sales Tax Act scheme, the Court held
that the legislature deliberately excluded the application of the principle underlying
Section 14 except to the limited extent that it may amount to sufficient cause for
condoning delay within the period of 18 months.
23. Close upon the heels of this judgment comes another 3-Judge Bench decision under
the same provision of the U.P. Sales Tax Act. In this judgment, another 3-Judge Bench
i n C.S.T. v. Madan Lal Das and Sons MANU/SC/0536/1976 : 1976 (4) SCC 464,
without adverting to either Parson Tools or the three other judgments mentioned
hereinabove went on to apply Section 12(2) of the Limitation Act to proceedings under
the U.P. Sales Tax Act. None of the aforesaid four decisions were pointed out to the
court and it was not argued that the Limitation Act applies only to courts and not to

Sales Tax authorities who are quasi-judicial Tribunals. This judgment, therefore, is not
an authority for the proposition that the Limitation Act would apply to Tribunals as
opposed to courts. Clearly the conclusion reached would be contrary to four earlier
decisions three of which are 3-Judge Bench decisions.
24. In fact, even after this judgment, in Officer on Special Duty (Land Acquisition)
v. Shah Manilal Chandulal MANU/SC/1554/1996 : (1996) 9 SCC 414, this Court held
that a Land Acquisition Officer under the Land Acquisition Act not being a court, the
provisions of the Limitation Act would not apply. The court concluded, after adverting to
some of the previous judgments of this Court as follows:
18. Though hard it may be, in view of the specific limitation provided under
proviso to Section 18(2) of the Act, we are of the considered view that Sub-
section (2) of Section 29 cannot be applied to the proviso to Sub-section (2) of
Section 18. The Collector/LAO, therefore, is not a court when he acts as a
statutory authority Under Section 18(1). Therefore, Section 5 of the Limitation
Act cannot be applied for extension of the period of limitation prescribed under
proviso to Sub-section (2) of Section 18. The High Court, therefore, was not
right in its finding that the Collector is a court Under Section 5 of the Limitation
Act.
19. Accordingly, we hold that the applications are barred by limitation and the
Collector has no power to extend time for making an application Under Section
18(1) for reference to the court.
25. Two other judgments of this Court need to be dealt with at this stage. In Mukri
Gopalan v. Cheppilat Puthanpurayil Aboobacker MANU/SC/0453/1995 : (1995) 5
SCC 5, a 2-Judge Bench of this Court held that the Limitation Act would apply to the
appellate authority constituted Under Section 13 of the Kerala Buildings (Lease and Rent
Control) Act, 1965. This was done by applying the provision of Section 29(2) of the
Limitation Act. Despite referring to various earlier judgments of this Court which held
that the Limitation Act applies only to courts and not to Tribunals, this Court in this case
held to the contrary. In distinguishing the Parson Tools' case, which is a 3-Judge Bench
binding on the Court that decided Mukri Gopalan's case, the Court held:
If the Limitation Act does not apply then neither Section 29(2) nor Section
14(2) of the Limitation Act would apply to proceedings before him. But so far
as this Court is concerned it did not go into the question whether Section 29(2)
would not get attracted because the U.P. Sales Tax Act Judge (Revisions) was
not a court but it took the view that because of the express provision in Section
10(3)(B) applicability of Section 14(2) of the Sales Tax Act was ruled out.
Implicit in this reasoning is the assumption that but for such an express conflict
or contrary intention emanating from Section 10(3)(B) of the U.P. Sales Tax Act
which was a special law, Section 29(2) would have brought in Section 14(2) of
the Limitation Act even for governing period of limitation for such revision
applications. In any case, the scope of Section 29(2) was not considered by the
aforesaid decision of the three learned Judges and consequently it cannot be
held to be an authority for the proposition that in revisional proceedings before
the Sales Tax authorities functioning under the U.P. Sales Tax Act Section 29(2)
cannot apply as Mr. Nariman would like to have it.
It then went on to follow the judgment reported in The Commissioner of Sales Tax,
U.P. v. Madan Lal Das and Sons, Bareilly MANU/SC/0536/1976 : (1976) 4 SCC 464

which, as has been pointed out earlier, is not an authority for the proposition that the
Limitation Act would apply to Tribunals. In fact, Mukri Gopalan's case was distinguished
in Om Prakash v. Ashwani Kumar Bassi MANU/SC/0658/2010 : (2010) 9 SCC 183
at paragraph 22 as follows:
22. The decision in Mukri Gopalan case [MANU/SC/0453/1995 : (1995) 5 SCC
5] relied upon by Mr. Ujjal Singh is distinguishable from the facts of this case.
In the facts of the said case, it was the District Judges who were discharging
the functions of the appellate authority and being a court, it was held that the
District Judge, functioning as the appellate authority, was a court and not
persona designata and was, therefore, entitled to resort to Section 5 of the
Limitation Act. That is not so in the instant case where the Rent Controller
appointed by the State Government is a member of the Punjab Civil Services
and, therefore, a persona designata who would not be entitled to apply the
provisions of Section 5 of the Limitation Act, 1963, as in the other case.
The fact that the District Judge himself also happened to be the appellate authority
under the Rent Act would have been sufficient on the facts of the case for the Limitation
Act to apply without going into the proposition that the Limitation Act would apply to
tribunals.
26. Quite apart from Mukri Gopalan's case being out of step with at least five earlier
binding judgments of this Court, it does not square also with the subsequent judgment
i n Consolidated Engg. Enterprises v. Principal secy., Irrigation Deptt.
MANU/SC/7460/2008 : (2008) 7 SCC 169. A 3-Judge Bench of this Court was asked to
decide whether Section 14 of the Limitation Act would apply to Section 34(3) of the
Arbitration and Conciliation Act, 1996. After discussing the various provisions of the
Arbitration Act and the Limitation Act, this Court held:
23. At this stage it would be relevant to ascertain whether there is any express
provision in the Act of 1996, which excludes the applicability of Section 14 of
the Limitation Act. On review of the provisions of the Act of 1996 this Court
finds that there is no provision in the said Act which excludes the applicability
of the provisions of Section 14 of the Limitation Act to an application submitted
Under Section 34 of the said Act. On the contrary, this Court finds that Section
43 makes the provisions of the Limitation Act, 1963 applicable to arbitration
proceedings. The proceedings Under Section 34 are for the purpose of
challenging the award whereas the proceeding referred to Under Section 43 are
the original proceedings which can be equated with a suit in a court. Hence,
Section 43 incorporating the Limitation Act will apply to the proceedings in the
arbitration as it applies to the proceedings of a suit in the court. Sub-section
(4) of Section 43, inter alia, provides that where the court orders that an
arbitral award be set aside, the period between the commencement of the
arbitration and the date of the order of the court shall be excluded in computing
the time prescribed by the Limitation Act, 1963, for the commencement of the
proceedings with respect to the dispute so submitted. If the period between the
commencement of the arbitration proceedings till the award is set aside by the
court, has to be excluded in computing the period of limitation provided for any
proceedings with respect to the dispute, there is no good reason as to why it
should not be held that the provisions of Section 14 of the Limitation Act would
be applicable to an application submitted Under Section 34 of the Act of 1996,
more particularly where no provision is to be found in the Act of 1996, which
excludes the applicability of Section 14 of the Limitation Act, to an application

made Under Section 34 of the Act. It is to be noticed that the powers Under
Section 34 of the Act can be exercised by the court only if the aggrieved party
makes an application. The jurisdiction Under Section 34 of the Act, cannot be
exercised suo motu. The total period of four months within which an
application, for setting aside an arbitral award, has to be made is not unusually
long. Section 34 of the Act of 1996 would be unduly oppressive, if it is held
that the provisions of Section 14 of the Limitation Act are not applicable to it,
because cases are no doubt conceivable where an aggrieved party, despite
exercise of due diligence and good faith, is unable to make an application
within a period of four months. From the scheme and language of Section 34 of
the Act of 1996, the intention of the legislature to exclude the applicability of
Section 14 of the Limitation Act is not manifest. It is well to remember that
Section 14 of the Limitation Act does not provide for a fresh period of limitation
but only provides for the exclusion of a certain period. Having regard to the
legislative intent, it will have to be held that the provisions of Section 14 of the
Limitation Act, 1963 would be applicable to an application submitted Under
Section 34 of the Act of 1996 for setting aside an arbitral award.
While discussing Parson Tools, this Court held:
25...In appeal, this Court held that (1) if the legislature in a special statute
prescribes a certain period of limitation, then the Tribunal concerned has no
jurisdiction to treat within limitation, an application, by excluding the time
spent in prosecuting in good faith, on the analogy of Section 14(2) of the
Limitation Act, and (2) the appellate authority and the revisional authority were
not "courts" but were merely administrative tribunals and, therefore, Section 14
of the Limitation Act did not, in terms, apply to the proceedings before such
tribunals.
26. From the judgment of the Supreme Court in CST [MANU/SC/0449/1975 :
(1975) 4 SCC 22 : 1975 SCC (Tax) 185 : (1975) 3 SCR 743]it is evident that
essentially what weighed with the Court in holding that Section 14 of the
Limitation Act was not applicable, was that the appellate authority and the
revisional authority were not "courts". The stark features of the revisional
powers pointed out by the Court, showed that the legislature had deliberately
excluded the application of the principles underlying Sections 5 and 14 of the
Limitation Act. Here in this case, the Court is not called upon to examine scope
of revisional powers. The Court in this case is dealing with Section 34 of the
Act which confers powers on the court of the first instance to set aside an
award rendered by an arbitrator on specified grounds. It is not the case of the
contractor that the forums before which the Government of India undertaking
had initiated proceedings for setting aside the arbitral award are not "courts".
In view of these glaring distinguishing features, this Court is of the opinion that
the decision rendered in CST [MANU/SC/0449/1975 : (1975) 4 SCC 22: 1975
SCC (Tax) 185: (1975) 3 SCR 743] did not decide the issue which falls for
consideration of this Court and, therefore, the said decision cannot be
construed to mean that the provisions of Section 14 of the Limitation Act are
not applicable to an application submitted Under Section 34 of the Act of 1996.
In a separate concurring judgment Justice Raveendran specifically held:
44. It may be noticed at this juncture that the Schedule to the Limitation Act
prescribes the period of limitation only to proceedings in courts and not to any

proceeding before a tribunal or quasi-judicial authority. Consequently Sections
3 and 29(2) of the Limitation Act will not apply to proceedings before the
tribunal. This means that the Limitation Act will not apply to appeals or
applications before the tribunals, unless expressly provided.
While dealing with Parson Tools, the learned Judge held:
56. I n Parson Tools [MANU/SC/0449/1975 : (1975) 4 SCC 22] this Court did
not hold that Section 14(2) was excluded by reason of the wording of Section
10(3-B) of the Sales Tax Act. This Court was considering an appeal against the
Full Bench decision of the Allahabad High Court. Two Judges of the High Court
had held that the time spent in prosecuting the application for setting aside the
order of dismissal of appeals in default, could be excluded when computing the
period of limitation for filing a revision Under Section 10 of the said Act, by
application of the principle underlying Section 14(2) of the Limitation Act. The
minority view of the third Judge was that the revisional authority Under Section
10 of the U.P. Sales Tax Act did not act as a court but only as a Revenue
Tribunal and therefore the Limitation Act did not apply to the proceedings
before such Tribunal, and consequently, neither Section 29(2) nor Section
14(2) of the Limitation Act applied. The decision of the Full Bench was
challenged by the Commissioner of Sales Tax before this Court, contending that
the Limitation Act did not apply to tribunals, and Section 14(2) of the Limitation
Act was excluded in principle or by analogy. This Court upheld the view that the
Limitation Act did not apply to tribunals, and that as the revisional authority
Under Section 10 of the U.P. Sales Tax Act was a tribunal and not a court, the
Limitation Act was inapplicable. This Court further held that the period of
pendency of proceedings before the wrong forum could not be excluded while
computing the period of limitation by applying Section 14(2) of the Limitation
Act. This Court, however, held that by applying the principle underlying Section
14(2), the period of pendency before the wrong forum may be considered as a
"sufficient cause" for condoning the delay, but then having regard to Section
10(3-B), the extension on that ground could not extend beyond six months. The
observation that pendency of proceedings of the nature contemplated by Section
14(2) of the Limitation Act, may amount to a sufficient cause for condoning the
delay and extending the limitation and such extension cannot be for a period in
excess of the ceiling period prescribed, is in the light of its finding that Section
14(2) of the Limitation Act was inapplicable to revisions Under Section 10(3-B)
of the U.P. Sales Tax Act. These observations cannot be interpreted as laying
down a proposition that even where Section 14(2) of the Limitation Act in terms
applied and the period spent before wrong forum could therefore be excluded
while computing the period of limitation, the pendency before the wrong forum
should be considered only as a sufficient cause for extension of period of
limitation and therefore, subjected to the ceiling relating to the extension of the
period of limitation. As we are concerned with a proceeding before a court to
which Section 14(2) of the Limitation Act applies, the decision in Parson Tools
[MANU/SC/0449/1975 : (1975) 4 SCC 22: 1975 SCC (Tax) 185: (1975) 3 SCR
743] which related to a proceeding before a Tribunal to which Section 14(2) of
the Limitation Act did not apply, has no application.
27. Obviously, the ratio of Mukri Gopalan does not square with the observations of the
3-Judge Bench in Consolidated Engineering Enterprises. In the latter case, this Court
has unequivocally held that Parson Tools is an authority for the proposition that the
Limitation Act will not apply to quasi-judicial bodies or Tribunals. To the extent that

Mukri Gopalan is in conflict with the judgment in the Consolidated Engineering
Enterprises case, it is no longer good law.
28. The sheet anchor in Mukri Gopalan was Section 29(2) of the Limitation Act. Section
29(2) states:
29. Savings.-
(2) Where any special or local law prescribes for any suit, appeal or application
a period of limitation different from the period prescribed by the Schedule, the
provisions of Section 3 shall apply as if such period were the period prescribed
by the Schedule and for the purpose of determining any period of limitation
prescribed for any suit, appeal or application by any special or local law, the
provisions contained in Sections 4 to 24 (inclusive) shall apply only insofar as,
and to the extent to which, they are not expressly excluded by such special or
local law.
A bare reading of this Section would show that the special or local law described therein
should prescribe for any suit, appeal or application a period of limitation different from
the period prescribed by the schedule. This would necessarily mean that such special or
local law would have to lay down that the suit, appeal or application to be instituted
under it should be a suit, appeal or application of the nature described in the schedule.
We have already held that such suits, appeals or applications as are referred to in the
schedule are only to courts and not to quasi-judicial bodies or Tribunals. It is clear,
therefore, that only when a suit, appeal or application of the description in the schedule
is to be filed in a court under a special or local law that the provision gets attracted.
This is made even clearer by a reading of Section 29(3). Section 29(3) states:
29. Savings.-
(3) Save as otherwise provided in any law for the time being in force with
respect to marriage and divorce, nothing in this Act shall apply to any suit or
other proceeding under any such law.
29. When it comes to the law of marriage and divorce, the Section speaks not only of
suits but other proceedings as well. Such proceedings may be proceedings which are
neither appeals nor applications thus making it clear that the laws relating to marriage
and divorce, unlike the law of limitation, may contain proceedings other than suits,
appeals or applications filed in courts. This again is an important pointer to the fact that
the entirety of the Limitation Act including Section 29(2) would apply only to the three
kinds of proceedings mentioned all of which are to be filed in courts.
30. It now remains to consider the decision of a 2-Judge Bench reported in P. Sarathy
v. State Bank of India MANU/SC/0422/2000 : (2000) 5 SCC 355. This judgment has
held that an abortive proceeding before the appellate authority Under Section 41 of the
Tamil Nadu Shops and Establishment Act would attract the provisions of Section 14 of
the Limitation Act inasmuch as the Appellant in this case had been prosecuting with due
diligence another civil proceeding before the appellate authority under the Tamil Nadu
Shops and Establishment Act, which appeal was dismissed on the ground that the said
Act was not applicable to nationalized banks and that, therefore, such appeal would not
be maintainable. This Court made a distinction between "Civil Court" and "court' and
expanded the scope of Section 14 stating that any authority or Tribunal having the
trappings of a Court would be a "court" within the meaning of Section 14. It must be
remembered that the word "Court" refers only to a proceeding which proves to be

abortive. In this context, for Section 14 to apply, two conditions have to be met. First,
the primary proceeding must be a suit, appeal or application filed in a Civil Court.
Second, it is only when it comes to excluding time in an abortive proceeding that the
word "Court" has been expanded to include proceedings before tribunals.
31. This judgment is in line with a large number of authorities which have held that
Section 14 should be liberally construed to advance the cause of justice-see: Shakti
Tubes Ltd. v. State of Bihar MANU/SC/8471/2008 : (2009) 1 SCC 786 and the
judgments cited therein. Obviously, the context of Section 14 would require that the
term "court" be liberally construed to include within it quasi-judicial Tribunals as well.
This is for the very good reason that the principle of Section 14 is that whenever a
person bonafide prosecutes with due diligence another proceeding which proves to be
abortive because it is without jurisdiction, or otherwise no decision could be rendered
on merits, the time taken in such proceeding ought to be excluded as otherwise the
person who has approached the Court in such proceeding would be penalized for no
fault of his own. This judgment does not further the case of Shri Viswanathan in any
way. The question that has to be answered in this case is whether suits, appeals or
applications referred to by the Limitation Act are to be filed in courts. This has nothing
to do with "civil proceedings" referred to in Section 14 which may be filed before other
courts or authorities which ultimately do not answer the case before them on merits but
throw the case out on some technical ground. Obviously the word "court" in Section 14
takes its colour from the preceding words "civil proceedings". Civil proceedings are of
many kinds and need not be confined to suits, appeals or applications which are made
only in courts stricto sensu. This is made even more clear by the explicit language of
Section 14 by which a civil proceeding can even be a revision which may be to a quasi-
judicial tribunal under a particular statute.
Whether the Principle of Section 14 would apply to an appeal filed Under
Section 128 Customs Act.
128. Appeals to Commissioner (Appeals).--(1) Any person aggrieved by
any decision or order passed under this Act by an officer of customs lower in
rank than a Commissioner of Customs may appeal to the Commissioner
(Appeals) within [sixty days] from the date of the communication to him of
such decision or order:
[Provided that the Commissioner (Appeals) may, if he is satisfied that the
Appellant was prevented by sufficient cause from presenting the appeal within
the aforesaid period of sixty days, allow it to be presented within a further
period of thirty days.]
[(1-A) The Commissioner (Appeals) may, if sufficient cause is shown, at any
stage of hearing of an appeal, grant time, from time to time, to the parties or
any of them and adjourn the hearing of the appeal for reasons to be recorded in
writing:
Provided that no such adjournment shall be granted more than three times to a
party during hearing of the appeal.]
(2) Every appeal under this section shall be in such form and shall be verified
in such manner as may be specified by rules made in this behalf.
Prior to its amendment in 2001, the said Section read as under:

1 2 8 . Appeals to Collector (Appeals).--(1) Any person aggrieved by any
decision or order passed under this Act by an officer of customs lower in rank
than a Collector of Customs may appeal to the Collector (Appeals) within three
months from the date of the communication to him of such decision or order:
Provided that the Collector (Appeals) may, if he is satisfied that the Appellant
was prevented by sufficient cause from presenting the appeal within the
aforesaid period of three months, allow it to be presented within a further
period of three months.
(2) Every appeal under this section shall be in such form and shall be verified
in such manner as may be specified by rules made in this behalf.
We have already held that the Limitation Act including Section 14 would not apply to
appeals filed before a quasi-judicial Tribunal such as the Collector (Appeals) mentioned
in Section 128 of the Customs Act. However, this does not conclude the issue. There is
authority for the proposition that even where Section 14 may not apply, the principles
on which Section 14 is based, being principles which advance the cause of justice,
would nevertheless apply. We must never forget, as stated in Bhudan Singh and Anr.
v. Nabi Bux and Anr. MANU/SC/0353/1969 : (1970) 2 SCR 10, that justice and reason
is at the heart of all legislation by Parliament. This was put in very felicitous terms by
Hegde, J. as follows:
Before considering the meaning of the word "held" in Section 9, it is necessary
to mention that it is proper to assume that the lawmakers who are the
representatives of the people enact laws which the society considers as honest,
fair and equitable. The object of every legislation is to advance public welfare.
In other words as observed by Crawford in his book on Statutory Constructions
the entire legislative process is influenced by considerations of justice and
reason. Justice and reason constitute the great general legislative intent in
every piece of legislation. Consequently where the suggested construction
operates harshly, ridiculously or in any other manner contrary to prevailing
conceptions of justice and reason, in most instances, it would seem that the
apparent or suggested meaning of the statute, was not the one intended by the
law-makers. In the absence of some other indication that the harsh or
ridiculous effect was actually intended by the legislature, there is little reason
to believe that it represents the legislative intent.
32. This is why the principles of Section 14 were applied in J. Kumaradasan Nair v.
Iric Sohan MANU/SC/0186/2009 : (2009) 12 SCC 175 to a revision application filed
before the High Court of Kerala. The Court held:
16. The provisions contained in Sections 5 and 14 of the Limitation Act are
meant for grant of relief where a person has committed some mistake. The
provisions of Sections 5 and 14 of the Limitation Act alike should, thus, be
applied in a broad based manner. When Sub-section (2) of Section 14 of the
Limitation Act per se is not applicable, the same would not mean that the
principles akin thereto would not be applied. Otherwise, the provisions of
Section 5 of the Limitation Act would apply. There cannot be any doubt
whatsoever that the same would be applicable to a case of this nature.
17. There cannot furthermore be any doubt whatsoever that having regard to
the definition of "suit" as contained in Section 2(l) of the Limitation Act, a
revision application will not answer the said description. But, although the

provisions of Section 14 of the Limitation Act per se are not applicable, in our
opinion, the principles thereof would be applicable for the purpose of
condonation of delay in filing an appeal or a revision application in terms of
Section 5 thereof.
18. It is also now a well-settled principle of law that mentioning of a wrong
provision or non-mentioning of any provision of law would, by itself, be not
sufficient to take away the jurisdiction of a court if it is otherwise vested in it in
law. While exercising its power, the court will merely consider whether it has
the source to exercise such power or not. The court will not apply the
beneficent provisions like Sections 5 and 14 of the Limitation Act in a pedantic
manner. When the provisions are meant to apply and in fact found to be
applicable to the facts and circumstances of a case, in our opinion, there is no
reason as to why the court will refuse to apply the same only because a wrong
provision has been mentioned. In a case of this nature, Sub-section (2) of
Section 14 of the Limitation Act per se may not be applicable, but, as indicated
hereinbefore, the principles thereof would be applicable for the purpose of
condonation of delay in terms of Section 5 thereof.
The Court further quoted from Consolidated Engineering Enterprises an instructive
passage:
21. In Consolidated Engg. Enterprises v. Irrigation Deptt. [MANU/SC/7460/2008
: (2008) 7 SCC 169] this Court held: (SCC p. 181, para 22)
22. The policy of the section is to afford protection to a litigant against
the bar of limitation when he institutes a proceeding which by reason
of some technical defect cannot be decided on merits and is dismissed.
While considering the provisions of Section 14 of the Limitation Act,
proper approach will have to be adopted and the provisions will have to
be interpreted so as to advance the cause of justice rather than abort
the proceedings. It will be well to bear in mind that an element of
mistake is inherent in the invocation of Section 14. In fact, the section
is intended to provide relief against the bar of limitation in cases of
mistaken remedy or selection of a wrong forum. On reading Section 14
of the Act it becomes clear that the legislature has enacted the said
section to exempt a certain period covered by a bona fide litigious
activity. Upon the words used in the section, it is not possible to
sustain the interpretation that the principle underlying the said section,
namely, that the bar of limitation should not affect a person honestly
doing his best to get his case tried on merits but failing because the
court is unable to give him such a trial, would not be applicable to an
application filed Under Section 34 of the Act of 1996. The principle is
clearly applicable not only to a case in which a litigant brings his
application in the court, that is, a court having no jurisdiction to
entertain it but also where he brings the suit or the application in the
wrong court in consequence of bona fide mistake or (sic of) law or
defect of procedure. Having regard to the intention of the legislature
this Court is of the firm opinion that the equity underlying Section 14
should be applied to its fullest extent and time taken diligently
pursuing a remedy, in a wrong court, should be excluded. See Shakti
Tubes Ltd. v. State of Bihar [MANU/SC/8471/2008 : (2009) 1 SCC
786].

3 3 . Various provisions of the Limitation Act are based on advancing the cause of
justice. Section 6 is one such. It reads as follows:
6. Legal disability.--(1) Where a person entitled to institute a suit or make an
application for the execution of a decree is, at the time from which the
prescribed period is to be reckoned, a minor or insane, or an idiot, he may
institute the suit or make the application within the same period after the
disability has ceased, as would otherwise have been allowed from the time
specified therefor in the third column of the Schedule.
(2) Where such person is, at the time from which the prescribed period is to be
reckoned, affected by two such disabilities, or where, before his disability has
ceased, he is affected by another disability, he may institute the suit or make
the application within the same period after both disabilities have ceased, as
would otherwise have been allowed from the time so specified.
(3) Where the disability continues up to the death of that person, his legal
representative may institute the suit or make the application within the same
period after the death, as would otherwise have been allowed from the time so
specified.
(4) Where the legal representative referred to in Sub-section (3) is, at the date
of the death of the person whom he represents, affected by any such disability,
the rules contained in Sub-sections (1) and (2) shall apply.
(5) Where a person under disability dies after the disability ceases but within
the period allowed to him under this section, his legal representative may
institute the suit or make the application within the same period after the death,
as would otherwise have been available to that person had he not died.
Explanation.--For the purposes of this section, 'minor' includes a child in the
womb.
On the assumption that Section 6 does not apply on the facts of a given case, can it be
said that the principles on which it is based have no application? Suppose, in a given
case, the person entitled to institute a proceeding not governed by the Limitation Act
were a minor, a lunatic or an idiot, would he not be entitled to institute such
proceedings after such disability has ceased, for otherwise he would be barred by the
period of limitation contained in the particular statute governing his rights. This Section
again is a pointer to the fact that courts always lean in favour of advancing the cause of
justice where a clear case is made out for so doing.
34. However, it remains to consider whether Shri Sanghi is right in stating that Section
128 is a complete code by itself which necessarily excludes the application of Section
14 of the Limitation Act. For this proposition he relied strongly on Parson Tools which
has been discussed hereinabove. As has already been stated, Parson Tools was a
judgment which turned on the three features mentioned in the said case. Unlike the U.P.
Sales Tax Act, there is no provision in the Customs Act which enables a party to invoke
suo moto the appellate power and grant relief to a person who institutes an appeal out
of time in an appropriate case. Also, Section 10 of the U.P. Sales Tax Act dealt with the
filing of a revision petition after a first appeal had already been rejected, and not to a
case of a first appeal as provided Under Section 128 of the Customs Act. Another
feature, which is of direct relevance in this case, is that for revision petitions filed under
the U.P. Sales Tax Act a sufficiently long period of 18 months had been given beyond

which it was the policy of the legislature not to extend limitation any further. This
aspect of Parson Tools has been explained in Consolidated Engineering in some detail
by both the main judgment as well as the concurring judgment. In the latter judgment,
it has been pointed out that there is a vital distinction between extending time and
condoning delay. Like Section 34 of the Arbitration Act, Section 128 of the Customs Act
is a Section which lays down that delay cannot be condoned beyond a certain period.
Like Section 34 of the Arbitration Act, Section 128 of the Customs Act does not lay
down a long period. In these circumstances, to infer exclusion of Section 14 or the
principles contained in Section 14 would be unduly harsh and would not advance the
cause of justice. It must not be forgotten as is pointed out in the concurring judgment
in Consolidated Engineering that:
Even when there is cause to apply Section 14, the limitation period continues to
be three months and not more, but in computing the limitation period of three
months for the application Under Section 34(1) of the AC Act, the time during
which the applicant was prosecuting such application before the wrong court is
excluded, provided the proceeding in the wrong court was prosecuted bona
fide, with due diligence. Western Builders [MANU/SC/2967/2006 : (2006) 6
SCC 239] therefore lays down the correct legal position."
35. Merely because Parson Tools also dealt with a provision in a tax statute does not
make the ratio of the said decision apply to a completely differently worded tax statute
with a much shorter period of limitation-Section 128 of the Customs Act. Also, the
principle of Section 14 would apply not merely in condoning delay within the outer
period prescribed for condonation but would apply de hors such period for the reason
pointed out in Consolidated Engineering above, being the difference between exclusion
of a certain period altogether Under Section 14 principles and condoning delay. As has
been pointed out in the said judgment, when a certain period is excluded by applying
the principles contained in Section 14, there is no delay to be attributed to the Appellant
and the limitation period provided by the concerned statute continues to be the stated
period and not more than the stated period. We conclude, therefore, that the principle
of Section 14 which is a principle based on advancing the cause of justice would
certainly apply to exclude time taken in prosecuting proceedings which are bona fide
and with due diligence pursued, which ultimately end without a decision on the merits
of the case.
3 6 . Shri Sanghi also cited Ranbaxy Laboratories Ltd. v. Union of India
MANU/SC/1269/2011 : (2011) 10 SCC 292. He relied upon paragraph 14 of this
judgment which reads as follows:
14. It is a well-settled proposition of law that a fiscal legislation has to be
construed strictly and one has to look merely at what is said in the relevant
provision; there is nothing to be read in; nothing to be implied and there is no
room for any intendment. (See Cape Brandy Syndicate v. IRC [(1921) 1 KB 64]
and Ajmera Housing Corporation v. CIT [MANU/SC/0623/2010 : (2010) 8 SCC
739].).
37. We do not see how this judgment furthers the argument of Shri Sanghi. This is only
reiteration of the classic statement of law contained in the Cape Brandy Syndicate case.
Further, the context of this paragraph is that a literal meaning has to be given to a
charging Section in a tax statute. When it comes to machinery provisions in tax statutes
and provisions which provide for appeals and the limitation period within which such
appeals have to be filed, it is clear that the aforesaid observations would have no

application whatsoever.
38. Shri Sanghi then referred us to Sree Balaji Nagar Residential Assn. v. State of
Tamil Nadu MANU/SC/0794/2014 : (2015) 3 SCC 353 and read out paragraphs 10 and
11 from the said judgment. What was held by this Court in that case was that Section
24(2) of the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 does not exclude any period during which a
land acquisition proceeding which might have remain stayed on account of an injunction
granted by any Court. This was so held by contrasting the language of Section 24(2)
with the language of Section 19 and Section 69 of the same Act. This judgment again
would have no direct bearing on the proposition canvassed by Shri Sanghi that Section
128 of the Customs Act forms a complete code by itself.
What periods are to be excluded Under Section 14
3 9 . Shri Viswanathan, learned senior Counsel appearing for the Appellant, placed
before us a judgment of the Andhra Pradesh High Court in which it was held that even
prior to the institution of a particular proceeding, time taken in steps taken for
prosecuting such proceedings should also be excluded. In Tirumareddi Rajarao and
Ors. v. The State of Andhra Pradesh and Ors. MANU/AP/0106/1965 : AIR 1965 A.P.
388, the Andhra Pradesh High Court held that the period taken for preparatory steps
before instituting proceedings should also be excluded. It said:
13. We may now turn to the Chambers Twentieth Century Dictionary for the
meanings of the expression "to prosecute". It means:
To follow onwards or pursue in order to reach or accomplish; to
engage in practise to follow up to pursue, chase, to pursue by law; to
bring before a Court.
1 4 . These meanings do not vouch the construction of the section
advanced by the learned Government Pleader. In our opinion, the
section does not render it essential that the prosecution of the
proceedings should be continued exclusively in the Court, i.e. the
actual proceeding in the Court. There is justification for the view that it
is only the actual period between the presentation of a proceedings and
the disposal of that particular proceeding should be allowed under the
Sub-section. The time during which a party has been taking the
indispensable and necessary steps preparatory to initiate the
proceedings in a court should also be regarded as the time during
which he has been prosecuting the civil proceeding.
It is also to be borne in mind that Sub-section (1) makes no reference
to the pendency of the suit, appeal or other proceeding in a Court of
law. The legislature had used words of general import and of widest
amplitude. So, we do not find any justification for reading a restriction
into that Sub-section and to hold that the time during which a party
was engaged in taking steps for invoking the aid of the Court falls
outside the contemplation urged on behalf of the Respondents, while
the pendency of a proceeding in a Court could be deducted in
computing the period of limitation, the time occupied in obtaining
certified copies of the judgment which is an essential requisite for the
filing of an appeal or revision in the higher Court has to be disregarded
for purposes of Section 14. We do not think that the legislature would

have contemplated such a situation. It would certainly result in an
anomaly to hold that the time covered by taking the steps absolutely
necessary for initiating proceedings in a Court should be included in
calculating the period of limitation while the time during which a
former suit or application was pending in a Court should be excluded.
In our considered judgment the section does not make any distinction
between the steps which a litigant has to take to initiate proceedings in
a Court and the actual pendency of those proceedings in the Court.
40. I n Mst. Duliyabai and Ors. v. Vilayatali and Ors. MANU/MP/0090/1959 : AIR
1959 MP 271, a Division Bench of the High Court held:
What would be the time during which the Plaintiff has been prosecuting with
due diligence another civil proceeding in a Court of appeal? Certainly the time
requisite for obtaining the certified copies Under Section 12 of the Limitation
Act would be included within the meaning of the section. Also the limitation
prescribed for the filing of an appeal would be included, if the appeal be filed
on the last day of limitation.
But if the appeal be filed earlier, the time from the date of the order impugned
upto the actual date of filing of the appeal would certainly be the time during
which the Plaintiff can be said to be prosecuting another civil proceeding in a
court of appeal. We are unable to endorse the view of the learned trial Judge on
this point. A Division Bench of this Court consisting of Sir Gilbert Stone, C.J.
and Niyogi, J., in the case of Kasturchand v. Wazir Begum'
(MANU/NA/0146/1936 : AIR 1937 Nag 1) : ILR (1937) Nag 291, held with
reference to Article 11(1) of the Limitation Act as follows:
Then it is said that the Plaintiff is out of time owing to the operation of
Article 11(1) of the Limitation Act which, in the case of a suit by a
person against whom an order is passed on his objection in execution
proceedings, fixes one year. The dates are as follows: the objection
order was passed on 5-3-1928. The plaint was presented in one Court
on 15-9-1928, of course in time. That was returned by that Court on
14-12-1928, for presentation to what that Court held to be the proper
Court. The Plaintiff challenging the correctness of that order appealed
on 6-2-1929 and the appeal was dismissed on 2-9-1929, and the plaint
was presented to the Court as decided by die first Court, on 25-11-
1929. In our opinion the Plaintiff has been litigating the matter in a
Court which she bona fide believed to be the correct tribunal, believing,
to the extent of incurring costs of an appeal against the decision that it
was not the correct tribunal, for something like 10 months.
Those 10 months must be taken into account in considering the period
that has elapsed between the date of suit and the date when the plaint
was eventually filed in the correct Court, and if this is so taken into
account the time that has expired is less than a year. The limitation
point, therefore, in our opinion, fails.
In the case of Abdul Sattar v. Abdul Husan MANU/WB/0183/1936 : AIR 1936
Cal 400, the Plaintiffs had applied for execution of their decree. The judgment-
debtors raised objections to the execution on the ground of adjustment of the
decree. The question of adjustment was fought in appeals upto the highest

Court. Ultimately it was decided against the Plaintiffs by the final appellate
Court. The learned Judges constituting the Division Bench held that the
Plaintiffs were entitled to exclude the entire period from the date of the order
recording the adjustment upto the date of the final order of the highest
appellate Court. We feel that this interpretation of Section 14 is in consonance
with the wording of the Section. Therefore, differing from the learned trial
Judge, we hold that the Appellants were entitled to exclude the period from 18-
9-1948 to 15-12-1948.
4 1 . The language of Section 14, construed in the light of the object for which the
provision has been made, lends itself to such an interpretation. The object of Section 14
is that if its conditions are otherwise met, the Plaintiff/applicant should be put in the
same position as he was when he started an abortive proceeding. What is necessary is
the absence of negligence or inaction. So long as the Plaintiff or applicant is bonafide
pursuing a legal remedy which turns out to be abortive, the time beginning from the
date of the cause of action of an appellate proceeding is to be excluded if such appellate
proceeding is from an order in an original proceeding instituted without jurisdiction or
which has not resulted in an order on the merits of the case. If this were not so,
anomalous results would follow. Take the case of a Plaintiff or applicant who has
succeeded at the first stage of what turns out to be an abortive proceeding. Assume
that, on a given state of facts, a Defendant-Appellant or other Appellant takes six
months more than the prescribed period for filing an appeal. The delay in filing the
appeal is condoned. Under explanation (b) of Section 14, the Plaintiff or the applicant
resisting such an appeal shall be deemed to be prosecuting a proceeding. If the six
month period together with the original period for filing the appeal is not to be excluded
Under Section 14, the Plaintiff/applicant would not get a hearing on merits for no fault
of his, as he in the example given is not the Appellant. Clearly therefore, in such a case,
the entire period of nine months ought to be excluded. If this is so for an appellate
proceeding, it ought to be so for an original proceeding as well with this difference that
the time already taken to file the original proceeding, i.e. the time prior to institution of
the original proceeding cannot be excluded. Take a case where the limitation period for
the original proceeding is six months. The Plaintiff/applicant files such a proceeding on
the ninetieth day i.e. after three months are over. The said proceeding turns out to be
abortive after it has gone through a chequered career in the appeal courts. The same
Plaintiff/applicant now files a fresh proceeding before a court of first instance having
the necessary jurisdiction. So long as the said proceeding is filed within the remaining
three month period, Section 14 will apply to exclude the entire time taken starting from
the ninety first day till the final appeal is ultimately dismissed. This example also goes
to show that the expression "the time during which the Plaintiff has been prosecuting
with due diligence another civil proceeding" needs to be construed in a manner which
advances the object sought to be achieved, thereby advancing the cause of justice.
42. Section 14 has been interpreted by this Court extremely liberally inasmuch as it is a
provision which furthers the cause of justice. Thus, in Union of India v. West Coast
Paper Mills Ltd. MANU/SC/0191/2004 : (2004) 3 SCC 458, this Court held:
14...In the submission of the learned Senior Counsel, filing of civil writ petition
claiming money relief cannot be said to be a proceeding instituted in good faith
and secondly, dismissal of writ petition on the ground that it was not an
appropriate remedy for seeking money relief cannot be said to be 'defect of
jurisdiction or other cause of a like nature' within the meaning of Section 14 of
the Limitation Act. It is true that the writ petition was not dismissed by the High
Court on the ground of defect of jurisdiction. However, Section 14 of the

Limitation Act is wide in its application, inasmuch as it is not confined in its
applicability only to cases of defect of jurisdiction but it is applicable also to
cases where the prior proceedings have failed on account of other causes of like
nature. The expression 'other cause of like nature' came up for the
consideration of this Court in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi
[MANU/SC/0015/1974 : (1975) 4 SCC 628] and it was held that Section 14 of
the Limitation Act is wide enough to cover such cases where the defects are not
merely jurisdictional strictly so called but others more or less neighbours to
such deficiencies. Any circumstance, legal or factual, which inhibits
entertainment or consideration by the court of the dispute on the merits comes
within the scope of the section and a liberal touch must inform the
interpretation of the Limitation Act which deprives the remedy of one who has a
right.
Similarly, in India Electric Works Ltd. v. James Mantosh MANU/SC/0379/1970 :
(1971) 1 SCC 24, this Court held:
7. It is well settled that although all questions of limitation must be decided by
the provisions of the Act and the courts cannot travel beyond them the words
'or other cause of a like nature' must be construed liberally. Some clue is
furnished with regard to the intention of the legislature by Explanation III in
Section 14(2). Before the enactment of the Act in 1908, there was a conflict
amongst the High Courts on the question whether misjoinder and non-joinder
were defects which were covered by the words 'or other cause of a like nature'.
It was to set at rest this conflict that Explanation III was added. An extended
meaning was thus given to these words. Strictly speaking misjoinder or non-
joinder of parties could hardly be regarded as a defect of jurisdiction or
something similar or analogous to it.
43. As has been already noticed, Sarathy's case i.e. MANU/SC/0422/2000 : (2000) 5
SCC 355 has also held that the court referred to in Section 14 would include a quasi-
judicial tribunal. There appears to be no reason for limiting the reach of the expression
"prosecuting with due diligence" to institution of a proceeding alone and not to the date
on which the cause of action for such proceeding might arise in the case of appellate or
revisional proceedings from original proceedings which prove to be abortive.
Explanation (a) to Section 14 was only meant to clarify that the day on which a
proceeding is instituted and the day on which it ends are also to be counted for the
purposes of Section 14. This does not lead to the conclusion that the period from the
cause of action to the institution of such proceeding should be left out. In fact, as has
been noticed above, the explanation expands the scope of Section 14 by liberalizing it.
Thus, under explanation (b) a person resisting an appeal is also deemed to be
prosecuting a proceeding. But for explanation (b), on a literal reading of Section 14, if a
person has won in the first round of litigation and an appeal is filed by his opponent,
the period of such appeal would not be liable to be excluded under the Section, leading
to an absurd result. That is why a Plaintiff or an applicant resisting an appeal filed by a
Defendant shall also be deemed to prosecute a proceeding so that the time taken in the
appeal can also be the subject matter of exclusion Under Section 14. Equally,
explanation (c) which deems misjoinder of parties or a cause of action to be a cause of
a like nature with defect of jurisdiction, expands the scope of the section. We have
already noticed that the India Electric Works Ltd. judgment has held that strictly
speaking misjoinder of parties or of causes of action can hardly be regarded as a defect
of jurisdiction or something similar to it. Therefore properly construed, explanation (a)
also confers a benefit and does not by a side wind seek to take away any other benefit

that a purposive reading of Section 14 might give. We, therefore, agree with the
decision of the Madhya Pradesh High Court that the period from the cause of action till
the institution of appellate or revisional proceedings from original proceedings which
prove to be abortive are also liable to exclusion under the Section. The view of the
Andhra Pradesh High Court is too broadly stated. The period prior to institution of the
initiation of any abortive proceeding cannot be excluded for the simple reason that
Section 14 does not enable a litigant to get a benefit beyond what is contemplated by
the Section-that is to put the litigant in the same position as if the abortive proceeding
had never taken place.
What applies to the facts of this case: the limitation period in Section 128
pre-amendment or post amendment
44. Shri A.K. Sanghi, learned senior Counsel appearing on behalf of the revenue, has
strongly contended before us that the present appeal must attract the limitation period
as on the date of its filing. That being so, it is clear that the present appeal having been
filed before CESTAT only on 23.5.2003, it is Section 128 post amendment that would
apply and therefore the maximum period available to the Appellant would be 60 plus 30
days. Even if time taken in the abortive proceedings is to be excluded, the appeal filed
will be out of time being beyond the aforesaid period.
4 5 . It is settled law that periods of limitation are procedural in nature and would
ordinarily be applied retrospectively. This, however, is subject to a rider. In New India
Insurance Co. Ltd. v. Shanti Misra MANU/SC/0547/1975 : (1975) 2 SCC 840, this
Court held:
5 . On the plain language of Sections 110-A and 110-F there should be no
difficulty in taking the view that the change in law was merely a change of
forum i.e. a change of adjectival or procedural law and not of substantive law.
It is a well-established proposition that such a change of law operates
retrospectively and the person has to go to the new forum even if his cause of
action or right of action accrued prior to the change of forum. He will have a
vested right of action but not a vested right of forum. If by express words the
new forum is made available only to causes of action arising after the creation
of the forum, then the retrospective operation of the law is taken away.
Otherwise the general rule is to make it retrospective.
46. In answering a question which arose Under Section 110A of the Motor Vehicles Act,
this Court held:
7..."(1) Time for the purpose of filing the application Under Section 110-A did
not start running before the constitution of the tribunal. Time had started
running for the filing of the suit but before it had expired the forum was
changed. And for the purpose of the changed forum, time could not be deemed
to have started running before a remedy of going to the new forum is made
available.
(2) Even though by and large the law of limitation has been held to be a
procedural law, there are exceptions to this principle. Generally the law of
limitation which is in vogue on the date of the commencement of the action
governs it. But there are certain exceptions to this principle. The new law of
limitation providing a longer period cannot revive a dead remedy. Nor can it
suddenly extinguish a vested right of action by providing for a shorter period of
limitation.

47. This statement of the law was referred to with approval in Vinod Gurudas Raikar
v. National Insurance Co. Ltd. MANU/SC/0475/1991 : (1991) 4 SCC 333 as follows:
7. It is true that the Appellant earlier could file an application even more than
six months after the expiry of the period of limitation, but can this be treated to
be a right which the Appellant had acquired. The answer is in the negative. The
claim to compensation which the Appellant was entitled to, by reason of the
accident was certainly enforceable as a right. So far the period of limitation for
commencing a legal proceeding is concerned, it is adjectival in nature, and has
to be governed by the new Act--subject to two conditions. If under the
repealing Act the remedy suddenly stands barred as a result of a shorter period
of limitation, the same cannot be held to govern the case, otherwise the result
will be to deprive the suitor of an accrued right. The second exception is where
the new enactment leaves the claimant with such a short period for
commencing the legal proceeding so as to make it unpractical for him to avail
of the remedy. This principle has been followed by this Court in many cases
and by way of illustration we would like to mention New India Insurance Co.
Ltd. v. Smt. Shanti Misra [MANU/SC/0547/1975 : (1975) 2 SCC 840 : (1976) 2
SCR 266]. The husband of the Respondent in that case died in an accident in
1966. A period of two years was available to the Respondent for instituting a
suit for recovery of damages. In March, 1967 the Claims Tribunal Under Section
110 of the Motor Vehicles Act, 1939 was constituted, barring the jurisdiction of
the civil court and prescribed 60 days as the period of limitation. The
Respondent filed the application in July, 1967. It was held that not having filed
a suit before March, 1967 the only remedy of the Respondent was by way of an
application before the Tribunal. So far the period of limitation was concerned, it
was observed that a new law of limitation providing for a shorter period cannot
certainly extinguish a vested right of action. In view of the change of the law it
was held that the application could be filed within a reasonable time after the
constitution of the Tribunal; and, that the time of about four months taken by
the Respondent in approaching the Tribunal after its constitution, could be held
to be either reasonable time or the delay of about two months could be
condoned under the proviso to Section 110-A(3).
Both these judgments were referred to and followed in Union of India v. Harnam
Singh MANU/SC/0216/1993 : (1993) 2 SCC 162, see paragraph 12.
48. The aforesaid principle is also contained in Section 30(a) of the Limitation Act,
1963.
30. Provision for suits, etc., for which the prescribed period is shorter
than the period prescribed by the Indian Limitation Act, 1908.--
Notwithstanding anything contained in this Act,-
(a) any suit for which the period of limitation is shorter than the period
of limitation prescribed by the Indian Limitation Act, 1908, may be
instituted within a period of [seven years] next after the
commencement of this Act or within the period prescribed for such suit
by the Indian Limitation Act, 1908, whichever period expires earlier:
49. The reason for the said principle is not far to seek. Though periods of limitation,
being procedural law, are to be applied retrospectively, yet if a shorter period of
limitation is provided by a later amendment to a statute, such period would render the

vested right of action contained in the statute nugatory as such right of action would
now become time barred under the amended provision.
50. This aspect of the matter is brought out rather well in Thirumalai Chemicals Ltd.
v. Union of India MANU/SC/0427/2011 : (2011) 6 SCC 739 as follows:
22. Law is well settled that the manner in which the appeal has to be filed, its
form and the period within which the same has to be filed are matters of
procedure, while the right conferred on a party to file an appeal is a substantive
right. The question is, while dealing with a belated appeal Under Section 19(2)
of FEMA, the application for condonation of delay has to be dealt with under the
first proviso to Sub-section (2) of Section 52 of FERA or under the proviso to
Sub-section (2) of Section 19 of FEMA. For answering that question it is
necessary to examine the law on the point.
Substantive and procedural law
23. Substantive law refers to a body of rules that creates, defines and regulates
rights and liabilities. Right conferred on a party to prefer an appeal against an
order is a substantive right conferred by a statute which remains unaffected by
subsequent changes in law, unless modified expressly or by necessary
implication. Procedural law establishes a mechanism for determining those
rights and liabilities and a machinery for enforcing them. Right of appeal being
a substantive right always acts prospectively. It is trite law that every statute is
prospective unless it is expressly or by necessary implication made to have
retrospective operation.
24. Right of appeal may be a substantive right but the procedure for filing the
appeal including the period of limitation cannot be called a substantive right,
and an aggrieved person cannot claim any vested right claiming that he should
be governed by the old provision pertaining to period of limitation. Procedural
law is retrospective meaning thereby that it will apply even to acts or
transactions under the repealed Act.
25. Law on the subject has also been elaborately dealt with by this Court in
various decisions and reference may be made to a few of those decisions. This
Court in Garikapati Veeraya v. N. Subbiah Choudhry [MANU/SC/0008/1957 :
AIR 1957 SC 540], New India Insurance Co. Ltd. v. Shanti Misra
[MANU/SC/0547/1975 : (1975) 2 SCC 840],Hitendra Vishnu Thakur v. State of
Maharashtra [MANU/SC/0526/1994 : (1994) 4 SCC 602 : 1994 SCC (Cri)
1 0 8 7 ] , Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar
[MANU/SC/0643/1999 : (1999) 8 SCC 16] andShyam Sunder v. Ram Kumar
[MANU/SC/0405/2001 : (2001) 8 SCC 24], has elaborately discussed the scope
and ambit of an amending legislation and its retrospectivity and held that every
litigant has a vested right in substantive law but no such right exists in
procedural law. This Court has held that the law relating to forum and limitation
is procedural in nature whereas law relating to right of appeal even though
remedial is substantive in nature.
26. Therefore, unless the language used plainly manifests in express terms or
by necessary implication a contrary intention a statute divesting vested rights is
to be construed as prospective, a statute merely procedural is to be construed
as retrospective and a statute which while procedural in its character, affects
vested rights adversely is to be construed as prospective.

51. This judgment was strongly relied upon by Shri A.K. Sanghi for the proposition that
the law in force on the date of the institution of an appeal, irrespective of the date of
accrual of the cause of action for filing an appeal, will govern the period of limitation.
Ordinarily, this may well be the case. As has been noticed above, periods of limitation
being procedural in nature would apply retrospectively. On the facts in the judgment in
the Thirumalai case, it was held that the repealed provision contained in the Foreign
Exchange Regulation Act, namely, Section 52 would not apply to an appeal filed long
after 1.6.2000 when the Foreign Exchange Management Act came into force, repealing
the Foreign Exchange Regulation Act. It is significant to note that Section 52(2) of the
repealed Act provided a period of limitation of 45 plus 45 days and no more whereas
Section 19(2) of FEMA provided for 45 days with no cap thereafter provided sufficient
cause to condone delay is shown. On facts, in that case, the appeal was held to be
properly instituted Under Section 19, which as has been stated earlier, had no cap to
condonation of delay. It was, therefore, held that the Appellate Tribunal in that case
could entertain the appeal even after the period of 90 days had expired provided
sufficient cause for the delay was made out.
52. The present case stands on a slightly different footing. The abortive appeal had
been filed against orders passed in March-April, 1992. The present appeal was filed
Under Section 128, which Section continues on the statute book till date. Before its
amendment in 2001, it provided a maximum period of 180 days within which an appeal
could be filed. Time began to run on 3.4.1992 Under Section 128 pre amendment when
the Appellant received the order of the Superintendent of Customs intimating it about an
order passed by the Collector of Customs on 25.3.1992. Under Section 128 as it then
stood a person aggrieved by a decision or order passed by a Superintendent of Customs
could appeal to the Collector (Appeals) within three months from the date of
communication to him of such decision or order. On the principles contained in Section
14 of the Limitation Act the time taken in prosecuting an abortive proceeding would
have to be excluded as the Appellant was prosecuting bona fide with due diligence the
appeal before CEGAT which was allowed in its favour by CEGAT on 23.6.1998. The
Department preferred an appeal against the said order sometime in the year 2000 which
appeal was decided in their favour by this Court only on 12.3.2003 by which CEGAT's
order was set aside on the ground that CEGAT had no jurisdiction to entertain such
appeal. The time taken from 12.3.2003 to 23.5.2003, on which date the present appeal
was filed before the Commissioner (Appeals) would be within the period of 180 days
provided by the pre amended Section 128, when added to the time taken between
3.4.1992 and 22.6.1992. The amended Section 128 has now reduced this period, with
effect from 2001, to 60 days plus 30 days, which is 90 days. The order that is
challenged in the present case was passed before 2001. The right of appeal within a
period of 180 days (which includes the discretionary period of 90 days) from the date of
the said order was a right which vested in the Appellant. A shadow was cast by the
abortive appeal from 1992 right upto 2003. This shadow was lifted when it became
clear that the proceeding filed in 1992 was a proceeding before the wrong forum. The
vested right of appeal within the period of 180 days had not yet got over. Upon the
lifting of the shadow, a certain residuary period within which a proper appeal could be
filed still remained. That period would continue to be within the period of 180 days
notwithstanding the amendment made in 2001 as otherwise the right to appeal itself
would vanish given the shorter period of limitation provided by Section 128 after 2001.
53. We, therefore, set aside the order dated 25.2.2004 and remand the case to CESTAT
for a decision on merits. The appeal is allowed in the aforesaid terms. There will be no
order as to costs.

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M.P. Steel Corporation vs. Commissioner of Central Excise (23.04.2015 - SC)

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MANU/SC/0484/2015

IN THE SUPREME COURT OF INDIA

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