Case Law Details
Acme Paints and Resin Private Limited Vs Deputy Commissioner of Revenue State Tax & Ors. (Calcutta High Court)
Summary: In the case of Acme Paints and Resin Pvt. Ltd. v. Deputy Commissioner of Revenue, State Tax, the Calcutta High Court allowed the Assessee’s appeal despite a delay in filing, due to an oversight by the company’s accountant. The petitioner had filed an appeal under Section 73(9) of the CGST Act against a prior order and had also deposited the required pre-deposit of ₹1,76,141 under Section 107(6) of the Act. However, the appeal was filed late, and the Appellate Authority rejected it for being beyond the time limit under Section 107(4) of the CGST Act. The court acknowledged that the explanation of accountant oversight was inadequate but accepted it in the interest of justice, considering the Assessee’s lack of mala fide intentions and the pre-deposit made. The court set aside the order dismissing the appeal, subject to the Assessee paying a cost of ₹25,000 to the GST authorities. This decision aligns with prior cases emphasizing that while strict timelines apply, bona fide errors and the merits of a case can justify some leniency when substantial compliance is shown.
Introduction: The Hon’ble Calcutta High Court in the case of Acme Paints and Resin (P.) Ltd. v. Deputy Commissioner of Revenue, State Tax [WPA No. 12250 of 2024 date July 04, 2024] held that since the Assessee had deposited pre-deposit amount and there was no lack of bona fide on part of the Assessee, explanation given by the Assessee that delay in filing appeal was due to an oversight by accountant, though not entirely adequate, was accepted in interest of justice.
Facts:
M/s Acme Paints and Resin (P.) Ltd. (“the Petitioner”) aggrieved by the Order dated August 14, 2023, passed under Section 73(9) of the Central Goods and Service Tax Act, 2017 (“the CGST Act”), filed an appeal before the Appellate Authority. Simultaneously, with the filing of the appeal, the Petitioner had also made pre-deposit of Rs.1,76,141/- in terms of provisions of Section 107(6) of the CGST Act, as is required for maintaining the appeal. The said appeal was, however, filed beyond the time prescribed for filing of an appeal as provided for under Section 107(4) of the CGST Act because the Petitioner’s accountant who deals with all tax matters overlooked the aforesaid order on the portal.
The Petitioner could not appropriately explain the delay in filing the appeal. Consequently, the appeal was rejected by Appellate Authority vide Order dated March 15, 2024 (“the Impugned Order”).
Hence, aggrieved by the Impugned Order, the present writ petition was filed the Petitioner.
Issue:
Whether an appeal can be filed beyond limitation period?
Held:
The Hon’ble Calcutta High Court in WPA No. 12250 of 2024 held as under:
- Held that, the Petitioner had filed an appeal against the order dated August 14, 2023, under Section 73(9) of the CGST Act. Simultaneously, with the filing of the appeal, the Petitioner had also made a pre-deposit of Rs.1,76,141/-. It cannot be said that there is any lack of bona fide on the part of the Petitioner. The Petitioner claims that by reasons of oversight on the part of its accountant, the appeal could not be filed on time. The aforesaid explanation though, does not appear to be adequate, however, for the end of justice and taking into consideration of the fact that the Petitioner may have merits in the appeal and the Petitioner having deposited the pre-deposit amount. Hence, the Impugned Order was set aside, subject to the Petitioner’s making payment of cost of Rs.25,000/- with the concerned GST authorities.
Our Comments:
The Hon’ble Calcutta High Court in the case of Arvind Gupta v. Assistant Commissioner of Revenue State Taxes [Writ Petition Application No. 2904 of 2023 dated January 04, 2024], held that the Appellate Authority has the discretion to allow an appeal to be presented within one month after expiry of the period of limitation stipulated from the date of communication of the order upon sufficient cause being shown as per Section 107 (4) of the CGST Act.
Further, the Hon’ble Kerala High Court in M/s Penuel Nexus Pvt Ltd. v. The Additional Commissioner (Appeals), Cochin [WP(C) No. 15574 of 2023 dated June 13, 2023] held that the Additional Commissioner is right in rejecting the time-barred appeal as section 107 of the CGST Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act, 1963. Further, relied on the judgment of the Hon’ble Supreme Court in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur and others [(2008) 3 SCC 70] wherein the court held that since there is complete exclusion of section 5 of the Limitation Act,1963, therefore the Commissioner and the High Court were justified in holding that there was no power to condone the delay after the expiry of 30 days period.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. The present writ petition has been filed, inter alia, challenging the order dated 15th March, 2024, passed by the appellate authority under Section 107 of the CGST/WBGST Act, 2017 (hereinafter referred to as the “said Act”)
2. It is the petitioner’s case that being aggrieved by theorder dated 14th August, 2023, passed under Section 73(9) of the said Act, the petitioner had filed an appeal before the appellate authority. Simultaneously, with the filing of the appeal, the petitioner had also made pre-deposit of Rs.1,76,141/-in terms of provisions of Section 107(6) of the said Act, as is required for maintaining the appeal. The said appeal was, however, filed beyond the time prescribed for filing of an appeal as provided for under Section 107(4) of the said Act. It appears that the petitioner could not appropriately explain the delay in filing the appeal. It is on such ground, the appeal had been rejected.
3. Mr. Basu Thakur, learned advocate representing the petitioner submits that the petitioner had been prevented from preferring the appeal within the time prescribed. It is contended that the petitioner’s accountant who deals with all tax matters had overlooked the aforesaid order on the portal. It is submitted that the petitioner has good grounds for preferring the appeal and has a fair chance of success. The aforesaid appeal should not be rejected on technical grounds.
4. Mr. Siddiqui, learned advocate representing the respondents submits that the appeal was filed belatedly. There is no proper explanation for condonation of delay. In the facts as noted hereinabove, there is no irregularity on the part of the appellate authority in rejecting the appeal on the ground of limitation.
5. Heard the learned advocates appearing for the respective parties and considered the materials on record. It appears that being aggrieved by the order dated 14th August, 2023, passed under Section 73(9) of the said Act an appeal had been filed. Simultaneously, with the filing of the appeal, the petitioner had also made a pre-deposit of Rs.1,76,141/-. As such, from the above, it cannot be said that there is any lack of bona fide on the part of the petitioner. The petitioner claims that by reasons of oversight on the part of its accountant, the appeal could not be filed on time. The aforesaid explanation though, does not appear to be adequate, however, for the end of justice and taking into consideration of the fact that the petitioner may have merits in the appeal and the petitioner having deposited the pre-deposit amount, I propose to and do hereby set aside the order dated 15th March, 2024, subject to the petitioner’s making payment of cost of Rs.25,000/- with the concerned GST authorities.
6. If the petitioner makes the aforesaid payment within a period of two weeks from date and files an application praying for condonation of delay, before the appellate authority disclosing the receipt of payment costs, the appellate authority shall condone the delay and hear out the appeal on merits upon giving an opportunity of hearing to the petitioner. It is made clear that the aforesaid direction is peremptory.
7. In the event, the petitioner fails to comply with the direction indicated hereinabove, the petitioner shall not be entitled to the benefit of this order and the writ petition shall stand automatically dismissed without any further reference to the petitioner.
8. With the above observations and directions, the writ petition is disposed of.
9. There shall be no order as to costs.
10. Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities.
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