Simla Gomti Pan Products Pvt. Ltd. Vs Commissioner Of State Tax U.P. Lko. And 2 Others (Allahabad High Court)
Allahabad HC Quashes GST Order for Ignoring Section 14 of Limitation Act, Remands for Fresh Consideration;Allahabad High Court Directs Re-evaluation of GST Appeal Limitation
Prayagraj: The Allahabad High Court has directed the appellate authority under the Goods and Services Tax (GST) Act to re-examine the dismissal of appeals filed by Simla Gomti Pan Products Pvt. Ltd., which were rejected on grounds of being time-barred. The court emphasized the need to consider the applicability of Section 14 of the Limitation Act, 1963, which provides for the exclusion of time spent prosecuting a case in a court without jurisdiction.
The case stems from an ex-parte order issued on June 12, 2024, by the respondent against Simla Gomti Pan Products under Section 74 of the GST Act. The petitioner contended that this order was passed without granting an opportunity of hearing and without providing crucial documents, specifically an SIB report, which formed the basis of the allegations.
Aggrieved by the ex-parte order, the petitioner initially filed a writ petition (Writ Tax No. 220 of 2024) before the High Court. This was disposed of on September 4, 2024, with a direction for the petitioner to file a reply within ten days, after which the matter would be considered on merits. The court also directed the provision of the SIB report.
The petitioner then challenged this High Court order before the Supreme Court by filing an SLP (SLP 25574 of 2024), which was dismissed on November 4, 2024, without delving into the merits of the High Court’s order.
Following the Supreme Court’s dismissal, the petitioner filed regular appeals under Section 107 of the GST Act on November 6, 2024. These appeals were subsequently dismissed by the appellate authority through orders dated November 11, 2024, and November 23, 2024. The dismissal was based on the appeals being beyond the limitation period prescribed under Section 107 of the GST Act. The appellate authority also noted the non-deposit of the mandatory 10% pre-deposit and referenced a previous High Court ruling in M/s A V Construction vs. Commissioner and Ors. (Writ Tax No. 819 of 2021, decided on September 30, 2021), which held that Section 5 of the Limitation Act was not applicable to appeals under Section 107 of the GST Act beyond the stipulated condonable period.
The petitioner argued before the High Court that they were diligently pursuing legal remedies in good faith by approaching the High Court and then the Supreme Court. They contended that the time spent in these proceedings should be excluded while calculating the limitation period for filing the appeals before the GST appellate authority, as per Section 14 of the Limitation Act. The petitioner cited the Supreme Court judgment in P. Steel Corporation vs. Commissioner of Central Excise ((2015) 7 SCC 58) in support of this argument. They also challenged the initial order under Section 74 of the GST Act, stating that the show cause notice lacked allegations of fraud, willful misstatement, or suppression of facts necessary to invoke this section, and that the SIB report was not provided.
The Standing Counsel for the State argued that the petitioner had been given an opportunity to collect the SIB report and that the previous writ petition, which was disposed of, precluded a fresh challenge to the assessment order in a subsequent writ. It was also contended that the petitioner failed to utilize the ten-day window granted by the High Court to file the appeal.
The High Court, after considering the submissions, observed that the petitioner appeared to have been bona fide pursuing remedies before the High Court and the Supreme Court. The court found that the appellate authority’s dismissal orders were flawed for not considering the potential applicability of Section 14 of the Limitation Act.
Citing P. Steel Corporation and Suryachakra Power Corporation Limited vs. Electricity Department Represented by Its Superintending Engineer, Port Blair and Ors. ((2016) 16 SCC 152), the High Court quashed the appellate authority’s orders dated November 11, 2024, and November 23, 2024. The matter has been remanded back to the appellate authority for a fresh decision, directing it to consider the principles laid down in the cited Supreme Court judgments regarding the exclusion of time under Section 14 of the Limitation Act. The appellate authority has been directed to pass a fresh order within three weeks, and the petitioner has been granted liberty to submit relevant documents and case laws.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
