Ambiguity and clarification on notification about filing appeal with Amnesty scheme
In November 2023, the CBIC has issued a notification (Notification Number: 53/2023-Central tax dated 2-11-2023) providing an amnesty for late filers of appeal and allowing them an opportunity to file appeal who could not file their appeal on time. Since the notification is dated November it will not be correct to spell through the intricacies of the notification, since everyone would have read and started taking the benefit of the notification. This article is to highlight the challenges faced by the trade and tax payers due to the usage of certain clauses which is leading to anomalous situations.
The notification has been issued to provide relief to certain taxpayers who could not file appeal on time with certain specified conditions as provided in the said notification.
However, a close reading of the notification and reading it with precision would reveal the following observations which needs immediate attention –
1. There is a proviso provided in the notification which specifies the applicability of the scheme which reads as follows:
“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 fulfils the condition specified at para 3 below”
By reading of the proviso would give an understanding that this special condition will have to be fulfilled for all appeals filed even earlier to the date of notification. Well, when an appeal has already been filed and accepted then by action of the authorities, my previous action cannot be negated. But the notification through the above stated proviso is trying to do this, It is stating that an appeal which is filed and accepted on a prior day will have to fulfil additional conditions specified in the notification which is issued pursuant to the date of filing of appeal. This proviso tries to state that all appeals filed prior to the 2.11.2023 would have to fulfil the conditions of the notification even if they were right otherwise, this would be incorrect since as on the appeal filing date the notification was not existing and thereby any conditions subsequent to my action is principally incorrect.
But when the notification states that “shall be deemed to have been filed in accordance with this notification” is it trying to impose a condition that the additional pre-deposit of 25% of the tax in dispute is payable for any appeal filed before the notification date as well. This would call for second round of approval in spite of filing a effective appeal.
Also there seems to be no cut-off date as to the start date for appeals filed for which this notification would apply, leading to further confusion.
This seems to be very vague, but the wordings used in the above stated proviso makes one think in such a direction.
2. The second point to note is under point 5 of the notification it states that
“No appeal under this notification shall be admissible in respect of a demand not involving tax”
This condition implies that the relief of amnesty is available only for demand involving tax. But we have seen orders which have been passed under section 73 or section 74 purely for interest or penalty without any liability for tax. So, by virtue of the condition it implies that orders which are purely for interest or penalty only cannot be appealed?
The condition states that no appeal shall be admissible in respect of demand not involving tax. So only in the following scenarios – i.e. (a) Tax and interest (b) Tax and interest and penalty or (c) Tax and penalty cases can get the benefit of this scheme.
This is discriminatory and creating a separate class without making any intelligent differentiation and therefore not legal as per article 14 of our Constitution.
3. The final point of contention is the orders against which the amnesty will apply is only for orders passed under section 73 or 74. There are other sections as well where orders are passed and appeals are due for filing like section 76, orders related to movement of goods and goods held in transition. Orders passed under other sections also seek justice, but all those sections and their orders passed under those sections are left out. Wouldn’t that be discriminatory? And appeal filed against orders issued under section 73 and 74 only are covered under this notification. This is another point of concern which the board may have to think and clarify.
Since the effective last date for filing appeal under the notification that is the amnesty scheme is 31.01.2024 which is approaching very fast. So, the board should thrive for extension of the date and also clear the confusion and issue clarification at the earliest.