Amnesty Scheme under GST Act, for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period
Introduction
Appeal provisions have been inserted in the Act and given right to any aggrieved person and also department to file appeal against such decision or order of adjudicating authority. Such appeals are admitted only if filed within specified period. However, due to various reasons large number of taxable persons could not filed a first appeal to the Appellate authorities within specified period. In this background, Central Government has declared Amnesty Scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period. Salient features of said amnesty scheme are discussed in this article.
Provisions of Appeal to the Appellate authority
It is provided in section 107 (1) of the Act that any person aggrieved by any decision or order passed under the act by adjudicating authority may file first appeal to the Appellate Authorities prescribed in the act. Similarly, as per section 107 (2) of the act authorised officer, on direction of Commissioner may make an application to such Appellate Authority, in case order is found prejudicial to the interest of revenue. Two tier Departmental appeal system has been introduced in the act.
Time limit to file appeal.
As per section 107(1) of the Act, first appeal by aggrieved person should be filed within three months from the date of communication of said order or decision. Similarly, authorised officer of the Department should file an appeal ( an application ) within six months from date of communication of such order or decision. In case appeal is not filed within specified period, section 107 (4) gives power to the Appellate Authorities to condone the delay up to one month if there is a sufficient cause for non filing of appeal by the appellant within time. Thus maximum period of one month delay can be condoned and appeal filed after specified period are not admitted being barred by limitation. In the number of cases Courts, on the issue of condonation of delay in filing in appeal beyond one month, has held that delay beyond one month period in filing of appeal can not be condoned and such appeal can not be admitted.
Amnesty Scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period.
The Central Government, on the recommendations of the GST Council, declared an amnesty Scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period vide notification no 50/2023 Central Tax Dated 2.11.2023.
Nature of amnesty scheme.
In case the appellant has failed file appeal within specified period u/s 107, he has no legal remedy to redress grievance except to file writ in High courts. Said amnesty scheme allows to the taxable persons to file appeals against demand orders u/s 73 or 74 even beyond prescribed time limit. In other words said scheme extended limitation period and allows to file appeals which are barred by limitation by condoning delay in filing of such appeals . It does not grant any remission or concession or waiver in amount of tax , interest, penalty or late fee. On the contrary under the said scheme amount of pre deposit has been enhanced.
Persons eligible for amnesty scheme.
In view of said notification only taxable persons are eligible to avail benefit of amnesty scheme. As per section 2(107) taxable person means a person who is registered or liable to be registered under section 22 or 24 of the Act. Thus, unregistered person is also eligible if the order is passed u/s 73 or 74 of the Act. Since authorised officer of the Department does cover within ambit and scope of taxable person, he can not file appeal by availing benefits of said scheme.
On co-joint reading of recommendation of GST Council and above referred notification it is seen that following class of taxable persons is eligible to avail benefit of said amnesty scheme subject to satisfaction of prescribed conditions.
First – The taxable persons who could not file an appeal, against the order passed by the proper officer on or before the 31.03. 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,
Second – The taxable persons whose appeal against the order passed by the proper officer on or before the 31.03. 2023 under section 73 or 74 of the said Act was rejected solely on the grounds that the said appeal was not filed within the time period specified in section 107 of the Act.
Third – The taxable persons who have filed an appeal against the order passed by the proper officer on or before the 31.03. 2023 under section 73 or 74 of the said Act, but not filed within the time period specified in sub-section (1) of section 107 read with sub-section (4) of section 107 of the said Act and is pending before the Appellate Authority before the issuance of this notification.
Adjudication orders eligible for amnesty scheme.
Benefit of amnesty scheme is admissible only to an adjudication orders which are passed by Proper officer u/s 73 or 74 of the Act. Such order should be involving demand of tax. No appeal under this notification shall be admissible in respect of a demand not involving tax. In other word, benefit of amnesty scheme is not admissible to the order passed under section 73 or 74 where demand involve only of interest and penalty. Similarly, any orders passed under any sections of the Act, ( like section 47,50, 54, 60, 62, 63, 64, 122, 123,124 , 125, 129,130 of the Act), except 73 or 74 of the Act are not eligible for amnesty scheme.
Duration of amnesty scheme.
Duration of amnesty scheme is from 2.11.2023 to 31.01.2024. In order to avail benefit of said scheme the notified taxable persons should file appeal in form GST -APL -01 on or before 31.01.2024 with payment of amount of pre deposit.
Condition of payment of pre deposit.
The notified taxable persons are required to pay, full amount of tax, interest, fine, fee and penalty arising from the impugned order, and a sum equal to twelve and a half per cent. of the remaining amount of tax in dispute arising from the said order, as pre deposit before filing of an appeal. And out of above referred amount of pre deposit at least twenty percent should have been paid by debiting from the Electronic Cash Ledger and remaining can be paid by electronic credit ledger.
Whether benefit of amnesty scheme admissible to pending appeals?
Where the taxable person has filed appeal against the said order before issue of date of said notification and pending before the appellate authority, shall be deemed to be filed in accordance with said notification and delay in filing of appeal shall be condoned subject to payment of prescribed pre deposit. Thus, benefit of amnesty scheme is also admissible to the pending appeal who satisfies the prescribed conditions. In such case the appellants are required to calculate amount of pre deposit as per scheme and pay additional amount after considering earlier payments of pre deposit.
Whether benefit of amnesty scheme admissible to rejected appeals?
It is clearly provided in the notification that the taxable persons whose appeal against the order passed by the proper officer on or before the 31.03. 2023 under section 73 or 74 of the said Act was rejected solely on the grounds that the said appeal was not filed within the time period specified in section 107 of the Act, are also eligible to avail benefit of condonation of delay and required to file appeal in form GST-APL-01. However, such taxable persons are required to calculate amount of pre deposit as per notification and to pay additional amount after considering earlier payments of pre deposit.
Whether benefit of amnesty admissible to interest, penalty or late fee orders?
As per para 5 of the said notification no appeal under this notification shall be admissible in respect of a demand not involving tax. Accordingly, only composite orders passed u/s 73 or 74 involving demand of tax and interest and penalty are eligible for scheme. Hence, even though order is passed u/s 73 or 74 but it is only for interest or penalty or both then such order is not eligible for benefit of amnesty. Where independent orders are passed under different section for levy of interest, penalty or late fee, such orders are not eligible for benefit of amnesty scheme.
Whether refund admissible of excess pre deposit?
In some cases it may happen that taxable person has made excess payment of pre deposit. In such cases refund of excess payment will not be refunded till the decision of appeal. It is clearly provided in para 4 of the said notification that no refund shall be granted on account of said amnesty notification till the disposal of the appeal, in respect of any amount paid by the appellant, either on their own or on the directions of any authority (or) court, in excess of the amount specified in para 3 of said notification before the issuance of this notification, for filing an appeal under subsection (1) of Section 107 of the said Act.
Whether authorised officer of the Department can avail benefit of amnesty scheme to file appeal beyond specified period.?
Benefit of scheme is available to only to the notified taxable persons. Department is not covered under definition of the taxable person. However, Department can avail legal remedy of review of order u/s 108 where failed to filed appeal within prescribed period.
Conclusion
Government has declared amnesty scheme and extended period of limitation for the taxable persons who could not filed appeals within specified period and thereby given best opportunity to redress grievances by filing appeals to the Appellate authorities.
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Author: Motiram Kanadje | Retired Joint Commissioner of State Tax. Author can be reached via email Email- momakanadje@gmail.com
Disclaimer: Nothing contained in this document is to be construed as legal opinion or view ofauthor whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. The author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this article nor for any action taken in reliance thereon.
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