This article delves into the complex realm of time-barred appeals under GST, focusing on the Appellate Authority’s role. Currently, appeals exceeding the four-month limit prescribed by Section 107 of the CGST Act, 2017/SGST Act, 2017 face dismissal. However, divergent judicial opinions have emerged, leading to a nuanced exploration of this critical issue.
It is submitted that at present Appellate Authority is dismissing the appeal filed by the taxpayer under GST on the ground that the same was time barred being filed beyond the period of four months as prescribed under Section 107 of the CGST Act, 2017/SGST Act, 2017.
Further, when the taxpayer(s) are challenging the such order of the Appellate Authority before the respective Hon’ble High Court under their jurisdiction, but the Court are taking the plea that the Court under the extraordinary jurisdiction cannot interfere with the Appellate Authority’s order as the application of Limitation Act, 1963 does not apply to Section 107 of the CGST Act, 2017/SGST Act, 2017.
The Revenue Department in their submission before the Court is submitting the citation of Hon’ble Supreme Court in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur and Others reported in (2008) 3 SCC 70 and Commissioner of Customs and Central Excise v. Hongo India Private Limited and Another reported in (2009) 5 SCC 791. On the basis of these judgments, the Hon’ble Court(s) are dismissing the petition of the taxpayers. The High Court(s) are quoting the specific para of the Singh Enterprise (Supra) as under-
“8. The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of statute are not vested with jurisdiction to condone the delay beyond the permissible period provided under the statute. The period up to which the prayer for condonation can be accepted is statutorily provided. It was submitted that the logic of Section 5 of the Limitation Act, 1963 (in short “the Limitation Act”) can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow it to be presented within a further period of 30 days. In other words, this clearly shows that the appeal has to be filed within 60 days but in terms of the proviso further 30 days’ time can be granted by the appellate authority to entertain the appeal. The proviso to subsection (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only up to 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days’ period.”
Also, in Hongo India Private Ltd. (Supra) as under-
“31. In this regard, it is useful to refer to a recent decision of this Court in Punjab Fibres Ltd. [(2008) 3 SCC 73] The Commissioner of Customs, Central Excise, Noida was the appellant in this case. While considering the very same question, namely, whether the High Court has power to condone the delay in presentation of the reference under Section 35-H(1) of the Act, the two-Judge Bench taking note of the said provision and the other related provisions following Singh Enterprises v. CCE [(2008) 3 SCC 70] concluded that: (Punjab Fibres Ltd. case [(2008) 3 SCC 73] , SCC p. 75, para 8)
“8. … the High Court was justified in holding that there was no power for condonation of delay in filing reference application.”
32. As pointed out earlier, the language used in Sections 35, 35-B, 35-EE, 35- G and 35-H makes the position clear that an appeal and reference to the High Court should be made within 180 days only from the date of communication of the decision or order. In other words, the language used in other provisions makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning the delay only up to 30 days after expiry of 60 days which is the preliminary limitation period for preferring an appeal. In the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. The High Court was, therefore, justified in holding that there was no power to condone the delay after expiry of the prescribed period of 180 days.”
Time barred appeal can be condoned by Appellate Authority under GST-
But it is to be noted other side a different judgment of the Hon’ble Calcutta High Court dated 04.01.2024 in the matter of Arvind Gupta Vs Assistant Commissioner of Revenue State Taxes, Cooch Behar Charge & Ors, WPA/2904/2023, wherein recent judgment of the Hon’ble Division Bench of Calcutta High Court dated 01.12.2023 in the matter of S.K. Chakraborty & Sons versus Union of India & others M.A.T. Nos. 81-82 of 2022, was cited and mentioned that the Appellate Authority lacks power to condone the delay cannot be sustained in view of the judgment passed by the Hon’ble Division Bench of Calcutta High Court in the matter of S.K. Chakraborty & Sons (Supra). The Hon’ble Division Bench of Calcutta High Court in S.K. Chakraborty & Sons (supra) held thus:
“16. The Co-ordinate Bench in Kajal Dutta (supra) has construed the provisions of Section 107 (1) and (4) of the Act of 2017 and held that, the statute does not state that beyond the prescribed period of limitation the appellate authority cannot exercise jurisdiction.
17. It is in the interest of the nation that litigations come to an end as expeditiously as possible. To achieve such purpose, legislature has enacted the Act of 1963 and prescribed various period of limitation beyond which, the right to approach an authority for redressal of the grievances remain suspended. Apart from the general law of Limitation as prescribed in the Act of 1963, special statutes prescribe period of limitation for specific scenarios and mandates completion of proceedings within the time period specified.
Prescription of a period of limitation by a special statute may or may not exclude the applicability of the Act of 1963. In the context of the issue that has fallen for consideration herein the provision of the Act of 1963 particularly Section 29 (2) thereof should be considered.
18. Section 29 (2) of the Act of 1963, has provided for situations where special or local law prescribes a period of limitation different from the period prescribed by the Act of 1963. It has provided that the provisions of Section 3 shall apply as if such period were the period prescribed by the schedule to the Act of 1963, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 both inclusive shall apply only insofar as and to the extent to which they are not expressly excluded by the special or the local law.
19. Section 107 of the Act of 2017 does not exclude the applicability of the Act of 1963 expressly. It does not exclude the applicability of the Act of 1963 impliedly also if one has to consider the provisions of Section 108 of the Act of 2017 which provides for a power of revision to the designated authority, against an order of adjudication. In case of revision a far more enlarged period of time for the Revisional Authority to intervene has been prescribed. Two periods of limitations have been prescribed for two different authorities namely, the Appellate Authority and the Revisional Authority in respect of the same order of adjudication. Any interference with the order of adjudication either by the Appellate Authority or by the Revisional Authority would have an effect on the defaulter/noticee. Section 107 does not have a non-obstante clause rendering Section 29(2) of the Act of 1963 non applicable. In absence of specific exclusion of the Section 5 of the Act of 1963 it would be improper to read an implied exclusion thereof. Moreover, Section 107 in its entirety has not expressly stated that, Section 5 of the Act of 1963 stands excluded.
20. Therefore, in our view, since provisions of Section 5 of the Act of 1963 have not been expressly or impliedly excluded by Section 107 of the Act of 2017 by virtue of Section 29 (2) of the Act of 1963, Section 5 of the Act of 1963 stands attracted. The prescribed period of 30 days from the date of communication of the adjudication order and the discretionary period of 30 days thereafter, aggregating to 60 days is not final and that, in given facts and circumstances of a case, the period for filling the appeal can be extended by the Appellate Authority.
21. The issue that has been framed is answered in the affirmative, in favour of the appellant and against the revenue.”
In the aforesaid matter, the Hon’ble Division Bench of Calcutta High Court held that Section 107 of the CGST Act, 2017 does not exclude the applicability of the Limitation Act of 1963 expressly. The Hon’ble Division Bench of Calcutta High Court further observed that since the provisions of Section 5 of the Limitation Act of 1963 have not been expressly or impliedly excluded by Section 107 of the CGST Act, 2017 by virtue of Section 29(2) of the Limitation Act of 1963, Section 5 of the Limitation Act of 1963 stands attracted. It follows therefrom that the Appellate Authority is left with the discretion to allow an appeal to be presented within a period of one month after expiry of the period of limitation stipulated from the date of communication of the order upon sufficient cause being shown. Since the applicability of the 1963 Act has not been expressly or impliedly excluded, the Appellate Authority has the power to condone delay in preferring the appeal beyond the limitation specified in Section 107 of the said Act in view of the decision in S.K. Chakraborty (supra).
Divergent views taken by Hon’ble Allahabad High Court-
The Hon’ble High Court of Allahabad in the matter of M/s. Garg Enterprises vs. State of UP and Ors. (Writ Petition No. 291 of 2022 and Judgment Dated 19.01.2024) has taken the aforesaid citations on record and dismissed the petition by stating that “The Central Goods and Services Act is a special statute and a self-contained code by itself. Section 107 of the Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite law that Section 5 of the Limitation Act, 1963 will apply only if it is extended to the special statute. Section 107 of the Act specifically provides for the limitation and in the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. Accordingly, one cannot apply Section 5 of the Limitation Act, 1963 to the aforesaid provision.”
Now, the Hon’ble Allahabad High Court in the case of M/s. Yadav Steels v. Additional Commissioner and Anr. [Writ Tax No. 975 of 2023 dated February 15, 2024] dismissed the writ petition, thereby holding that, Section 5 of the Limitation Act, 1963 would not be applicable for appeal filed under Section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017. Counsel on behalf of the petitioner has fairly submitted that the appeal under Section 107 of the Act was filed beyond time. However, counsel on behalf of the petitioner relies on a Division Bench judgment of Calcutta High Court in the case of S.K. Chakraborty & sons vs. Union of India and others (supra) to argue that Section 5 of the Indian Limitation Act, 1963 would be attracted as Section 107 of the Act does not expressly or impliedly exclude the attraction of Section 5 of the Limitation Act.
The Hon’ble Allahabad High Court Yadav Steels (Supar) held that the judgment rendered by the Calcutta High Court in the matter of S.K. Chakraborty & Sons (supra) fails to adequately consider the authoritative pronouncements of the Supreme Court in the cases of Singh Enterprises (supra) and Hongo India (supra) and hence the said judgment is of no precedential value, and accordingly, the view expressed therein is not accepted by this Court.
Further the Court held that Section 107 of the GST Act prescribes a specific limitation period within which appeals against certain decisions must be filed. This limitation period is integral to the functioning of the appellate mechanism under the GST Act and reflects the legislative intent to expedite the resolution of tax disputes. By imposing a time limit on the filling of appeals, Section 107 aims to prevent undue delayed in the adjudication process and promote the efficient administration of the GST regime. On the other hand, Section 5 of the Limitation Act provides for the extension of prescribed periods in certain exceptional circumstances, such as when sufficient cause is shown for the delay.
In analyzing the conflicting interpretations concerning the exclusion of Section 5 of the Limitation Act as far as Section 107 of the GST Act is concerned, it is essential to consider the rationale behind the exclusion of the Limitation Act in certain special statues, particularly in the context of taxation. Tax laws are often characterized by strict procedural requirements and time-bound deadlines, reflecting the need for expeditious resolution of tax disputes to ensure revenue certainty and fiscal stability.
Taxing statutes like the GST Act embody a comprehensive framework with specific limitation provisions tailored to expedite the resolution of tax-related matters. Section 107 of the GST Act, operates as a complete code in itself, explicitly delineating limitation periods for filing appeals and implicitly excluding the application of general limitation provisions such as Section 5 of the Limitation Act.
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