Appellate Authority can only condone delay in GST appeals by one month, not beyond

Isha Holidays (P) Ltd Vs Commissioner (Kerala High Court)

The Hon’ble Kerala High Court in the case of M/s. Isha Holidays Private Limited v. The Commissioner, SGST Department & Ors. [W.P.(C) No. 30666 of 2023 dated September 25, 2023], dismissed the petition and held that the Appellate Authority has been vested with the power to condone the delay only by one month by satisfying that there exists a sufficient cause, which prevented the assessee from presenting the appeal beyond the period of three months.

Facts:

The Assessment order dated July 25, 2022 (“the Impugned Order”), was passed against M/s. Isha Holidays Private Limited (“the Petitioner”) under Section 73(1) of the Central Goods and Service Tax, 2017 (“the CGST Act”) amounting to Rs.4,52,826/- for tax period 2017-2018.

Aggrieved by the Impugned Order, the Petitioner filed an appeal under Section 107 of the CGST Act before the Appellate Authority (“the Respondent”). The Respondent, after evaluating the case, dismissed the appeal on the ground that the appeal was barred by limitation as there was a delay of 144 days under Section 107(1) read with Section 107(4) of the CGST Act.

Aggrieved by the decision of the Respondent, the Petitioner filed the writ petition before this Hon’ble Court under Article 226 of the Constitution of India.

Issue:

Whether the Appellate Authority has the power to condone delay beyond the period of one month as prescribed under Section 107(4) of the CGST Act?

Held:

The Hon’ble Kerala High Court in W.P.(C) No. 30666 of 2023 held as under:

• Observed that, the Petitioner could not enumerate upon any powers vested with the Respondent under which the delay could be condoned beyond the period of four months.
• Opined that, as per Section 107(1) of the CGST Act, the appeal had to be filed within the period of three months before the Respondent. Upon which the Respondent has the power to condone the delay by one month, if satisfied that there exists a sufficient cause.
• Held that, there are no powers vested with the Respondent to condone the delay beyond the period of four months as per Section 107(1) read with Section 107(4) of the CGST Act. Hence, dismissed the writ petition.

Relevant Provisions:

Section 107(1) and (4) of the CGST Act:

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) …………………….

(3) ……………………

(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.

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

1. The petitioner has filed this writ petition under Article 226 of the Constitution of India impugning Exhibit P-1 assessment order passed by the 2^nd respondent State Tax Officer under Section 73 read with Rule 142 of the Goods and Services Tax and Rules made thereunder for the tax period 2017-18. Total tax, interest and penalty for the said period have been assessed as Rs.4,52,826/- (Rupees Four lakh fifty two thousand eight hundred and twenty six only).

2. Against Exhibit P-1 assessment order dated 25.07.2022, the petitioner approached the department on appeal under Section 107 before the appellate authority. The appeal was filed on 18.03.2023. The appellate authority has dismissed the appeal on the ground that the same was barred by limitation as prescribed under Sub-section (1) read with Sub-section (4) of Section 107 read with Section 4 of the GST Act, 2017. The appeal was filed only on 18.03.2023 and it was in delay of 144 days. The appellate authority does not have any power to condone the delay in filing the appeal beyond the period of one month from the period of three months as prescribed under Sub-section 1 of Section 107 of the GST Act, 2017. As the petitioner has filed appeal beyond the total period of four months, it has been dismissed on the ground of delay.

3. Learned Counsel for the petitioner is not in a position to point out any powers vested with the appellate authority to condone the delay beyond the period of four months. The appeal has to be filed within a period of three months and the appellate authority has the powe to condone the delay by one month if the appellate authority is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within a period of three months.

4. In view of the fact that there is no power vested with the appellate authority to condone the delay beyond three months, this Court finds no grounds to entertain this writ petition and it is hereby dismissed.

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(Author can be reached at info@a2ztaxcorp.com)