GST Appellate Authority Must Consider Condonation of Delay Beyond One-Month

Phonex Traders Private Limited Vs Joint Commissioner of State Tax & Ors. (Calcutta High Court)

In the case Phonex Traders Private Limited vs. Joint Commissioner of State Tax & Ors., the Calcutta High Court dealt with a writ petition challenging the rejection of an appeal filed under Section 107 of the Central and West Bengal Goods and Services Tax Acts, 2017. The appellate authority had dismissed the petitioner’s appeal on the ground of limitation, as the appeal was filed 117 days late. While the petitioner made the required pre-deposit and filed an application for condonation of delay citing lack of knowledge of the GST portal and unforeseen staff changes and personal issues, the authority held that it had no power to condone delays beyond one month from the prescribed limit.

Upon reviewing the facts, the High Court found the petitioner’s delay justifiable, emphasizing that there was no evidence of mala fide intent. It noted that the individual originally handling the GST matter had left the organization, and his successor faced personal hardships due to his father’s illness, resulting in prolonged absence. The Court also referenced a previous Division Bench ruling in S.K. Chakraborty & Sons v. Union of India & Ors., which had held that the appellate authority must exercise jurisdiction in such cases. Concluding that the rejection was not in accordance with law, the Court set aside the appellate order, condoned the delay, and directed the authority to hear and decide the appeal on merit within 12 weeks.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

The present writ petition has been filed, inter alia, challenging the order dated 19^th September, 2024 passed by the appellate authority under Section 107 of the Central/West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as the “said Act”), whereby the petitioner’s appeal had been rejected on the ground that the same was barred by limitation. The facts are not in dispute. In connection with a proceeding initiated under Section 73 of the said Act, for the tax period July, 2017 to March, 2018 an order under Section 73(9) of the said Act was passed on 11^th December, 2021. Although, the petitioner preferred an appeal from the aforesaid order and simultaneously, with the filing of the appeal, had also made pre-deposit of Rs.5,85,290/- as is required for maintaining the appeal under the provisions of Section 107(6) of the said Act, there had been delay in filing of the appeal. In such circumstance, the petitioner had also filed an application on 1^st July, 2024 explaining the delay in preferring the appeal. According to the petitioner, the appellate authority without appropriately taking note of the grounds for condonation of delay had rejected the appeal, inter alia, on the ground that the appellate authority is competent only to condone the delay provided the appeal is filed within the period of one month beyond the time prescribed. He submits that the aforesaid order is perverse. In light of the facts presented in this case, this Court may be pleased to restore the appeal by condoning the delay.

Mr. Siddiqui, learned advocate enters appearance on behalf of the State-respondents.

Heard the learned advocates appearing for the respective parties and considered the materials on record.

Admittedly, in this case the petitioner filed an appeal challenging the order passed under Section 73(9) of the said Act. Simultaneously, with the filing of the appeal, the petitioner had also made a pre-deposit as is required for maintaining the appeal. As such there is no lack of bona fide on the part of the petitioner in preferring the appeal. It appears that the petitioner had also made a prayer for condonation of delay, inter alia, claiming that by reasons of lack of proper knowledge of the GST portal there had been delay in filing the appeal. There appears to be a delay of 117 days in filing the appeal.

Taking into consideration that the petitioner has explained in details that the individual responsible for the matter, Mr. Bimal Kumar Mondal left the organization on 30^th November, 2023 creating a temporary oversight gap and the file was passed on to Mr. SM Firoz Anwar, HOD, Accounts who faced significant health issue, of his father and had to attend to his ailing father in his village frequently resulting in his prolonged absence from the office for more than four months and as there is no lack of bona fide on the part of the petitioner and one does not stand to gain by filing a belated appeal, I am of the view that in the instant case, the appellate authority ought to have appropriately considered the application for condonation of delay filed by the petitioner.

The appellate authority, however, appears to have rejected the appeal on the ground of limitation by, inter alia, holding that the delay can only be condoned provided the same is filed within the period of one month of the time prescribed. The aforesaid observation made by the appellate authority runs counter to the observation made by the Hon’ble Division Bench of this Court in the case of S. K. Chakaraborty & Sons v. Union of India & Ors., reported in 2023 SCC Online Cal 4759.

The aforesaid would demonstrate that the appellate authority had failed to exercise the jurisdiction vested in Having regard to the above and taking note of the explanations provided by the petitioner while setting aside the order dated 19^th September, 2024, I condone the delay in preferring the appeal.

Accordingly, I direct the appellate authority to hear and dispose of the appeal, on merit, upon giving an opportunity of hearing to the petitioner, within a period of 12 weeks from the date of communication of this order.

With the above observations and directions, the writ petition is disposed of.

There shall be no order as to costs.

All parties shall act on the basis of the server copy of this order duly downloaded from the official website of this Court.