Case Law Details
Hikal Ltd Vs Joint Commissioner of Commercial Taxes (Appeals)-4 (Karnataka High Court)
The Karnataka High Court examined a writ petition challenging an appellate order that dismissed an appeal as time-barred under the Karnataka Goods and Services Tax Act, 2017. The dispute arose from rejection of the petitioner’s claim for transitional credit. After the petitioner filed an application seeking allowance of transitional credit, a notice proposing rejection was issued, followed by an order rejecting the claim.
Under Section 107 of the KGST Act, the petitioner was ordinarily required to file an appeal within the prescribed limitation period. However, the Central Government issued Notification No. 29/2023 dated 31 July 2023, granting a special window enabling taxpayers to file appeals under Section 107 within three months from the date of the notification. Relying on this notification, the petitioner filed the appeal on 31 October 2023, which was the last date permitted under the notification.
Despite this, the appellate authority dismissed the appeal as barred by limitation without considering the effect of the notification. The High Court noted that the appellate authority had failed to take into account Notification No. 29/2023, which expressly allowed the appeal to be filed up to 31 October 2023. Since the appeal was filed within this extended period, the dismissal on limitation grounds was held to be erroneous.
The Court held that the impugned order was contrary to the notification and therefore unsustainable in law. Accordingly, the High Court set aside the appellate order and remitted the matter back to the appellate authority for reconsideration on merits. It directed that the appeal be treated as filed within time and that the issue of limitation should not be reopened. The appellate authority was instructed to adjudicate the appeal afresh in accordance with law after granting reasonable opportunity to the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. In this petition, the petitioner seeks a following reliefs;
“(a) Issue a writ in the nature of certiorari or any other writ to quash the impugned Order bearing T.No965/23-24 [GST A.P. No. 168/2023-24] dated 29.12.2023 passed by Respondent No.1 [Annexure-A] issued by the Respondent;
(b) Grant such other order or direction as deemed fit in the facts and circumstances of the case in the interest of justice.”
2. Heard learned counsel for the petitioner and the learned counsel for the respondents.
3. Perusal of the material on record will indicate that the petitioner having filed an application seeking for allowing transitional credit, the second respondent issued a notice dated 15.02.2023 proposing to reject the petitioner’s application. The petitioner having submitted a reply dated 18.02.2023 to the said notice, the second respondent passed an order dated 21.02.2023 notifying the petitioner’s claim for credit.
4. Though the petitioner had to challenge the said order dated 21.02.2023 within a period of four months (3+1) as contemplated under Section 107(1) and 4 of the KGST Act. The Central Government having issued notification No.29/2023 enabling the tax payers to file appeals under Section 107 within a period of 3 months from the date of the notification issued on 31.07.2023. The petitioner filed the appeal before the first respondent appellate authority on 31.10.2023 which was the last date for filing the appeal as per the said notification. Despite the petitioner having filed the appeal on 31.10.2023 which was the last date of limitation as stipulated in the notification No.29/2023 dated 31.07.2023, the first respondent has proceeded to pass the impugned order dismissing the appeal as barred by limitation, aggrieved by which, the petitioner is before this Court by way of the present petition.
5. A perusal of the impugned order will indicate that the first respondent – appellate authority has failed to consider or taking into account the aforesaid Notification No.29/2023 dated 31.07.2023 which permitted/enabled the petitioner to file an appeal on or before 31.10.2023.
6. Under these circumstances, I am of the considered opinion that the impugned order at Annexure-A passed by the first respondent – appellate authority dismissing the appeal as being barred by limitation is clearly erroneous and contrary to the aforesaid notification warranting interference by this Court in the present petition which deserves to be allowed by setting aside the impugned order at Annexure-A dated 29.12.2023 and remitting the matter back to the first respondent for re-consideration of the appeal on merits and in accordance with law, without reference to the period of limitation which stands concluded in favour of the petitioner by this order.
7. In the result, I pass the following;
ORDER
i. The petition is hereby allowed.
ii. The impugned order at Annexure-A dated 29.12.2023 is thereby set aside.
iii. The matter is remitted back to the first respondent/appellate authority for re- consideration of the appeal filed by the petitioner on merits without reference to the period of limitation which stands concluded in favour of the petitioner by this order and by holding that the appeal is within time and not barred by limitation.
iv. The first respondent – appellate authority shall consider the appeal on merits and dispose of the same in accordance with law after providing sufficient and reasonable opportunity to the petitioner.
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