In GST, the adjudication is done by the Departmental Officers in a quasi-judicial capacity. If a person feels aggrieved by an adjudication order, he can file an appeal before the appellate authority. As per Section 107 (1) of the CGST Act, an appeal can be filed before the Appellate Authority[1] (Commissioner (Appeals) or Additional/ Joint Commissioner (Appeals) as the case may be) within three months from the date of communication of the decision or order. Further, under ss. 107 (4), there is provision for a further grace period of one month if the Appellate Authority is satisfied that the appellant was prevented by sufficient cause. The Appellate Authority has no power to condone delay beyond the condonable period even if it the Appellant had sufficient cause.
GST being a new law, many parties could not file appeal within the stipulated period of four months due to various reasons – mainly being not aware that the order was uploaded on the portal. Non-filing of appeal meant that the proceedings attained finality and the recovery provisions kicked in. Even if the taxpayer had a strong case, the demand went uncontested. It is a big blow to be hit with an uncontested demand.
On having their appeals rejected on limitation, some of the aggrieved parties filed CWPs before various High Courts invoking extraordinary jurisdiction of the courts, and there were divergent decisions of various high courts on the matter. For example, the Tripura High Court in Sanjib Kumar Pal v. Union of India [[2023] 153 taxmann.com 483 (TRIPURA)], the Patna High Court in Munna Traders v. State of Bihar [[2023] 153 taxmann.com 449 (Patna)] , in Punit Kumar Choubey v. Commissioner, Commercial Tax, Patna [[2023] 154 taxmann.com 28 (Patna)], and in Narayni Industry v. State of Bihar [[2023] 153 taxmann.com 632 (Patna)/[2023] 99 GST 681 (Patna)], the Kerala High Court in Penuel Nexus (P.) Ltd. v. Additional Commissioner Headquarters (Appeals) [[2023] 152 taxmann.com 208 (Kerala)], rejected petitions seeking waiver of delay beyond the statutory period. However, the Madras High Court in SRM Engineering Construction Corporation Ltd. v. Assistant Commissioner (ST) (FAC) [2023] 154 taxmann.com 448 (Madras)], the Andhra Pradesh High Court in J.V.K. Industries v. Union of India [[2023] 155 taxmann.com 89 (Andhra Pradesh)], and the Calcutta High Court in Kajal Dutta v. Assistant Commissioner of State Tax [2023] 148 taxmann.com 112 (Calcutta)] condoned the delay. In Vishwanath Traders v. Union of India [[2023] 153 taxmann.com 427 (SC)], the Supreme Court declined to give extension beyond the statutory period.
In these circumstances, the GST Council in its 52nd Meeting, came up with a rare window of opportunity to the time barred appeals. The GST Council acknowledged that this scheme will facilitate a large number of taxpayers, who could not file appeal in the past within the specified time period.
Now, the Government has notified the scheme vide Notification No. 53/2023- Central Tax dated 2nd November 2023. This notification has been issued under Section 148 which is regarding special procedure for certain processes. In this way, without disturbing the general provisions of Section 107 of the CGST Act, a special procedure has been carved out, under Section 148, for providing this general amnesty to all appeals which got time barred order passed by the proper officer on or before the 31st day of March, 2023.
The brass tacks the Amnesty Scheme are that the taxable persons who could not file an appeal against the order passed by the proper officer on or before the 31st day of March, 2023 under section 73 or 74 of the said Act within the time period specified in sub-section (1) of section 107 read with sub-section (4) of section 107 of the said Act, or their appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified can now file the appeal by follow the following special procedure for filing appeals in such cases, on or before 31st day of January 2024. For filing the appeal under this Amnesty Scheme, he appellant has to pay
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
(b) a sum equal to twelve and a half per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed, out of which at least twenty percent should have been paid by debiting from the Electronic Cash Ledger.
The amnesty scheme thus departs from Section 107 (6) (b) of the CGST Act and mandates a higher pre-deposit as well as an element of 2.5% (20 per cent of 12.5 per cent) of disputed amount through cash ledger. The amount already deposited in excess of the amounts mentioned in para 3 will not be refunded till the disposal of the appeal. Demands not involving tax are not covered under the Amnesty Scheme.
However, the language of the proviso to the second para of the Notification is vague; it reads as:
“Provided that an appeal against the said order filed in accordance with the provisions of section 107 of the said Act, and pending before the Appellate Authority before the issuance of this notification, shall be deemed to have been filed in accordance with this notification, if it fulfills the condition specified at para 3”
The intent and scope of this proviso needs further clarification.
Overall, the scheme is a welcome leeway to the taxpayers who otherwise have a good case on merits but could not avail the appellate remedy due to limitation.
(Disclaimer: The views expressed are the personal views of the author and is not a legal advice)
Notes
[1] For Detailed Discussion on Appellate Authority/ Adjudicating Authority visit https://taxguru.in/goods-and-service-tax/appellate-remedies-gst-law-part-i-first-appeal-gst-i.html.
Sir very Good