The Hon’ble Allahabad Court in M/s. Yash Kothari Public Charitable Trust v. the State of U.P and Ors. [Writ Tax No. 1027 of 2022 dated January 16, 2023] has held that taxing authorities cannot stop any assessee from claiming its statutory right of appeal, in the garb of technicality and cannot deny to entertain the appeal filed offline on technical grounds, due to the mistake of the department or the technical glitch in software when an appeal of assessee is not reflected on the portal. Further, directed the Revenue Department to consider the offline appeal of the Petitioner.
M/s. Yash Kothari Public Charitable Trust (“the Petitioner”) is a registered public charitable trust, constructing a hospital. The Petitioner had claimed certain exemptions, which was rejected by the Revenue Department (“the Respondent”) vide order dated January 12, 2022 (“the Impugned Order”). Further, the Petitioner had reversed certain Input Tax Credit (“ITC”) through FORM GSTR-3B dated February 08, 2022. The Respondent passed a summary order dated January 12, 2022. The Petitioner, however, filed for an appeal but the same was not reflected on the Goods and Services Tax (“GST”) Portal and the Portal displayed error. The Petitioner, thereafter lodged a complaint before the Respondent about the issue. Subsequently, a rectification order by the Respondent was issued dated April 19, 2022, and recovery proceedings were initiated dated April 21, 2022.
Being aggrieved, this petition has been filed.
The Petitioner contended that the GST portal was not accepting the appeal filed against the Impugned Order and the Respondent was not accepting the offline appeal and has further issued a correspondence dated June 30, 2022 (“the Impugned Correspondence”) requiring the Petitioner to furnish acknowledgment of online filing of appeal. Further that, Section 107 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) provided that the appeal must filed electronically or otherwise as may be notified by the Respondent however, the Respondent had not notified any other method for filing the appeal.
The Respondent contended that, the appeal against Impugned Order was maintainable but the Petitioner had failed to place the acknowledgement slip due to which, the appeal was unheard and undecided.
Whether the appeal rejected by the Respondent on technical grounds is sustainable?
The Hon’ble Allahabad High Court in Writ Tax No. 1027 of 2022 held as under:
Section 107 of the CGST Act:
“107. Appeals to Appellate Authority.–
(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.
(2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.
(3) Where, in pursuance of an order under sub-section (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application.
(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.
(5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed.
(6) No appeal shall be filed under sub-section (1), unless the appellant has paid-
(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 ten 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.
Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.
(7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.
(8) The Appellate Authority shall give an opportunity to the appellant of being heard.
(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.
(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.
(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:
Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:
Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74.
(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.
(13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:
Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.
(14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.
(15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.
(16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties.”
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Nishant Mishra, learned counsel for the petitioner and Sri A.C. Tripathi, learned Standing Counsel for the State.
2. This writ petition has been filed claiming relief for quashing the correspondence dated 30.06.2022 issued by the respondent no. 2 requiring the petitioner assessee to furnish acknowledgement of online filing of the appeal.
3. The case, in nutshell, is that the assessee, which is a registered public charitable trust and duly registered under the Societies Registration Act and also under Section 12-AA of the Income Tax Act, is constructing a charitable hospital and certain exemption was claimed by the assessee which was not granted by the assessment order passed on 12.01.2022 being order No. ZD090122015905M. After passing of the said order, the assessee reversed certain input tax credit through Form GSTR3B, which was filed on 08.02.2022. The department on 12.01.2022 passed a summary order under Rule 142 (5) of UP GST Rules, 2017. The assessee in the meantime had tried to file appeal online against the original order which was not accepted and the web-portal displayed error.
4. The assessee also preferred an appeal online against the summary order being order No. ZD090122015958B. The portal of the department reflected that the order number entered is already under appeal or appeal order has been passed. If error persists, please call GST help desk or log your issues on Grievance Redressal Portal for GST and quote error number. The assessee, thereafter, moved a letter before the authority making a complaint that the portal was not accepting the appeal against the order passed by the department. A rectification order under Section 161 was passed by the authorities on 19.04.2022, pursuant to which the recovery proceeding was initiated against the assessee on 21.04.2022. The Additional Commissioner, Grade-II (Appeals)-1, Commercial Tax, Kanpur on 28.04.2022 had required the assessee to submit the acknowledgement of appeal filed online. Hence, this petition.
5. Sri Nishant Mishra, learned counsel for the petitioner, submitted that the online portal of the department is not accepting the appeal filed by the assessee against the original order and the department is insisting for placing the acknowledgement of the appeal filed online and is not accepting the appeal filed offline. He further contends that Section 107 of CGST Act, 2008 provides for the filing of the appeal against the order passed under the Act. According to him, Rule 108 provides for the procedure and appeal to the Appellate Authority is to be filed in Form GST APL-01 alongwith relevant documents either electronically or otherwise as may be notified by the Commissioner. According to learned counsel, till date the Commissioner has not notified the other method through which an appeal could be filed.
6. He invited the attention of the Court to the definition clause 2 (80) wherein the word “notification” has been defined which means a notification published in official gazette and the expressions “notify” and “notified” shall be construed accordingly. According to assessee’s counsel, once the Commissioner has not made any notification or the State Government has issued any notification notifying the other mode of filing of an appeal, then the filing of appeal offline by the assessee cannot be denied by the department.
7. He next contended that in the counter affidavit there is no denial to paragraph no. 32 of the petition wherein assessee has taken a stand that till date no such notification has been issued by the Commissioner notifying the same in the official gazette. Reliance has been placed upon a Division Bench judgment of Andhra Pradesh High Court in case of Ali Cotton Mill Vs. Appellate Joint Commissioner (ST), 2022 (56) G.S.T.L. 270 (A.P.), wherein the Court held as under; “
10. As can be seen from Rule 108(1) of AP GST Rules, 2017, the language employed therein is as clear as crystal to the effect that an appeal to the appellate authority under Section 107(1) of the AP GST Act shall be filed along with form GST APL-01 and the relevant documents ‘either electronically or otherwise as may be notified by the Chief Commissioner’. So, till the Chief Commissioner specifies one particular mode of filing, the concerned appellant can choose to file the appeal either electronically or otherwise i.e., manually. In that view, the interpretation of the 1st respondent that since the Chief Commissioner has not given notification that the manual filing of the appeal can be accepted by the appellate authority, the appellant cannot file the appeal in manual form is contrary to the purport of Rule 108(1) of AP GST Rules, 2017.
11. In similar circumstances, Division Bench of this Court in W.P.No.9324 of 2019, dated 01.08.2019, held thus:
“Having regard to the facts and submissions and as the case of the petitioner requires adjudication on merits and when substantial justice is pitted against technical considerations, it is always necessary to prefer the ends of justice, we are of the considered view that the request of the petitioner merits consideration. Such course also would help the petitioner in having his cause decided on merits.”
8. Per contra, Sri A.C. Tripathi, learned Standing Counsel, submitted that the order which the assessee wants to challenge before the Appellate Authority in shape of original order No. ZD090122015905M only records the finding as to the demand and penalty and the summary order which has been passed under Rule 142 (5) of UP GST Rules should be challenged in appeal before the authority. According to him, the reference number of the said order is ZD090122015958B. The appeal against the said order has already been preferred by the assessee but he is not placing the acknowledgement slip before the authorities for its due consideration.
9. Learned Standing Counsel further contended that the word “notified” used in Rule 108 does not mean any notification which is to be issued by the Commissioner but it is a circular which Commissioner has issued in respect of filing of an appeal. He further invited the attention of the Court to the letter addressed by the Joint Commissioner (Legal), Commercial Tax to the Additional Commissioner, Grade-I dated 31.08.2022 wherein the officer concerned has tried to convince the senior officer that there being certain glitches in filing of appeal against the order passed under Section 161 of the Act and the assessee in those cases may prefer appeal offline.
10. According to him, in the present case, the appeal filed by the assessee against the summary order was maintainable and assessee has not placed before the Appellate Authority the acknowledgement slip due to which the appeal was not being heard and decided. He then invited the attention of the Court to the circular issued by the Commissioner, Commercial Tax, U.P. dated 11.08.2022 wherein the problem of technical glitches in filing of appeal was discussed by the Commissioner and a direction was issued to all the Appellate Authorities through out the State to get the matter resolved through the IT Cell and entertain the appeal online.
11. I have heard the respective counsel and perused the material on record.
12. The short question for consideration before this Court is that whether due to the mistake of the department or the technical glitch in software when an appeal of assessee is not reflected on the portal, whether the authorities can deny to entertain the appeal filed offline on technical grounds.
13. This is a case where the Taxing Authorities of the State are contesting tooth and nail up till this Court preventing the assessee from consideration of his appeal offline though, prima facie, it is clear that the appeal filed by the assessee is not being reflected on the web-portal of the department. The department is trying to justify its stand that an appeal will lie against a summary order passed in DRC-07 under Rule 142(5) of the Rules and not against the original order, which was passed under Section 74 of the Act being order No. ZD090122015905M.
14. Section 107 of the Act of 2017, which provides for appeal against the adjudication order, clearly states that any person aggrieved by any decision or order passed under the Act or the State Goods and Services Tax Act or the Union Territory Goods and Service Tax Act by an adjudicating authority may appeal to such Appellate Authority. The legislature has not put any embargo upon filing of an appeal before the Appellate Authority by a person aggrieved, against any order.
15. The contention of learned Standing Counsel that an appeal against order passed under Rule 142(5) that is a summary order, is only maintainable cannot be accepted by this Court. The legislature has used the word “any person aggrieved by any decision or order passed under this Act”. The order dated 12.01.2022 being order No. ZD090122015905M has been passed by the Adjudicating Authority and the assessee if aggrieved by that order cannot be stopped from challenging the order before the Appellate Authority. It is the Appellate Authority, who has to take final decision in the matter. The Appellate Authority is there to adjudicate the matter, which is before it under the provisions of the Act, and it cannot stop any aggrieved person from approaching the forum through filing the appeal restricting his right.
16. The Act has granted right to every person, who is aggrieved by an order passed by the Adjudicating Authority to approach the appellate forum as envisaged under Section 107. The act of the respondents in not entertaining the appeal offline is an act from stopping the assessee from getting his right adjudicated as provided under the Act.
17. Moreover, Rule 108 which is the procedure laid down for filing of an appeal clearly envisages situation where the appeal has to be filed electronically i.e. online. It further provides that appeal can also be filed otherwise as may be notified by the Commissioner. In the State of Uttar Pradesh, the Commissioner has not notified other mode of filing an appeal before the first Appellate Authority.
18. In the counter affidavit filed by the State, there is no denial to paragraph no. 32 of the writ petition wherein specific pleading has been made by the assessee that no other method has been notified by the Commissioner for filing appeal other than through electronic mode. The contention of learned Standing Counsel that Commissioner has issued a circular does not hold ground as the word ‘notification’ has been defined in Section 2(80) of the Act, which means a notification published in the official gazette and the expression ‘notify’ and ‘notified’ shall be construed accordingly.
19. There is absolute clarity by the legislature as to the notification which has to be published by the State Government in the official gazette. Once no such notification has been issued, it would be presumed that other mode of filing the appeal would be offline.
20. The view taken by the Division Bench of Andhra Pradesh High Court in Ali Cotton Mill (Supra) interpreting Rule 108 to the extent that in case of notification not issued by the Chief Commissioner, it will be presumed that other mode is only through offline.
21. This Court finds that the taxing authorities cannot stop any assessee from claiming his statutory right, as provided under this Act in the garb of technicality.
22. In view of the said fact, the correspondence dated 30.06.2022 issued by the respondent No.2 is hereby set-aside. The Additional Commissioner, Grade-II (Appeals)-1, Commercial Tax, Kanpur, is hereby directed to consider the appeal of the assessee filed offline strictly in accordance with law within a period of one month from the date of presentation of a certified copy of this order before him.
23. Writ petition stands partly allowed.
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