Meritas Hotels Pvt. Ltd. Vs State of Maharashtra (Bombay High Court)
The Bombay High Court recently delivered a crucial judgment in the case of Meritas Hotels Pvt. Ltd. Vs State of Maharashtra, addressing the issue of limitation for filing appeals under the Maharashtra Goods and Services Tax Act, 2017 (MGST Act). The court ruled that the date of communication of the impugned assessment order via email—April 20, 2019—would be regarded as the starting point for calculating the period of limitation.
Case Background
The petitioner, Meritas Hotels Pvt. Ltd., sought to challenge the refusal by the respondent authorities to entertain their appeal against an assessment order dated April 20, 2019. The assessment, passed under Section 62 of the MGST Act, imposed a tax liability of ₹20,96,888, an interest of ₹32,502, and a penalty of ₹23,06,577.
Due to financial constraints, the petitioner delayed filing the GST returns for February 2019. Consequently, a notice was issued on March 26, 2019, for non-filing of returns. Although the assessment order was sent via email on April 20, 2019, the petitioner claimed that the email was not brought to the management’s attention until their bank account was attached on July 1, 2019.
Subsequently, the petitioner obtained a certified copy of the order on November 6, 2019, and attempted to file a physical appeal on November 20, 2019. However, this appeal was not accepted. The order was later uploaded on the GST portal on January 8, 2020, after which the petitioner attempted an electronic appeal on January 10, 2020.
Petitioner’s Arguments
The petitioner contended that the delay in filing the appeal should be calculated from January 8, 2020, when the order was uploaded to the GST portal, rather than from April 20, 2019, the date of the email. It was further argued that:
- The email communication was not sufficient to trigger the limitation period as it was not effectively communicated to the management.
- The order was passed unilaterally, without an opportunity to present their case, violating principles of natural justice.
- The penalty levied was disproportionate to the assessed tax liability.
The petitioner relied on previous judicial rulings, emphasizing that appeals under Section 107 of the MGST Act could be filed within three months from the date of “effective” communication, which they argued was January 8, 2020.
Respondent’s Stand
The state argued that the email sent on April 20, 2019, constituted valid communication under the MGST Act. According to the respondents, the petitioner had sufficient time to file the appeal but failed to do so within the prescribed period of three months or even within the additional one-month grace period permitted under Section 107(4) of the Act.
