GST Appellate authority cannot entertain appeals filed beyond allowed periods

Venkateswara Rao Kesanakurti vs The State of Andhra (Andhra Pradesh High Court)

In the case of Venkateswara Rao Kesanakurti vs. The State of Andhra Pradesh, the Andhra Pradesh High Court addressed several writ petitions concerning the dismissal of appeals filed under Section 107 of the Central Goods and Service Tax Act due to exceeding the statutory limitation period. The petitioners argued that the appellate authority had the discretion to condone the delay beyond the specified timeframe, relying on provisions of the Limitation Act and prior judgments. However, the government’s counsel contended that there is an implicit exclusion of the Limitation Act’s provisions regarding the condonation of delays beyond the statutory period for tax-related appeals. The court examined Section 29(2) of the Limitation Act, emphasizing that special laws like the CGST Act set their own limitation periods, which must be adhered to. Ultimately, the High Court dismissed the petitions, affirming that the appellate authority could not entertain appeals filed beyond the allowed periods under the GST laws, thereby underscoring the importance of adhering to specified timelines in tax-related matters.

FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT

Heard Smt. Jyothi Ratna Anumolu, learned counsel appearing for the appellants and Sri T.C.D. Sekhar, learned Government Pleader for Commercial Taxes.

2. In all these writ petitions, the petitioners, being aggrieved by the orders of the assessing authorities, had filed appeals, before the appellate authorities, under section 107 of the Central Goods and Service Tax Act. However, these appeals have been filed beyond the period of limitation set out under the Act and the period of delay for which the appellate authority is empowered, under section 107 (4), to condone. These appeals were dismissed on the ground that they had been filed beyond limitation and cannot be considered. Aggrieved by these orders of dismissal, the petitioners have approached this court by way of these writ petitions.

3. The orders impugned in the present batch of writ petitions are as follows:

4. Section 107 of the APGST Act reads as follows:

107. (1) Any person aggrieved by any decision or order passed under this Act or the Central Goods and Services Tax Act, 2017 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 Chief Commissioner may, on his own motion, or upon request from the Commissioner of Central tax, call for and examine the record of any proceeding in which an adjudicating authority has passed any decision or order under this Act or the Central Goods and Services Tax Act, 2017 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 Chief Commissioner in his order.

(3) Where, in pursuance of an order under sub-section (2), the authorized 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 authorized 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. Smt. Jyothi Ratna Anumolu, learned counsel appearing for the petitioners would submit that even though Section 107 (4) empowers the appellate authority to permit condonation of delay for a period of one month beyond the statutory period of three months or six months provided under Section 107(1) and (2), the provisions of Section 29(2) of the Limitation Act, 1963 would permit the appellate authority to condone the delay beyond the period provided under Section 107 (2) or (3).

6. The learned counsel also relies upon the judgments in Union of India v. Popular Construction Co¹; Commissioner of Sales Tax, U.P. vs. Madan Lal Das & Sons, Bareilly²; Superintending Engineer / Dehar Power House Circle Bhakra Bea Management Board (PW) Slapper and Anr., vs. Excise and Taxation Officer, Sunder Nagar / Assessing Authority³; Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur and Ors.,⁴; Commissioner of Customs and Central Excise vs. Hongo India Private Limited and Anr.,⁵ and Penuel Nexus Pvt. Ltd., vs. The Additional Commissioner Headquarters (Appeals) and Ors.,⁶.

7. The learned Government Pleader for Commercial Taxes, on the other hand, relying upon the judgments in Assistant Commissioner vs. Glaxo Smith and a judgment of the Hon’ble High Court of Delhi dated 20.03.2023 in The Commissioner of Income Tax (International Taxation)-1, New Delhi vs. Brandix Mauritius Holdings Ltd.,⁷ in ITA No.163 of 2023, would contend that there is an implied exclusion of Section 5 of the Limitation Act and as such the appellate authority, under Section 107 (4) of the CGST Act, does not have power to condone the delay of filing of appeals beyond the additional period of one month.

Consideration of the Court:

8. Section 29(2) of the Limitation Act, 1963 reads as follows:

29 (2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule 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 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.

9. Any appeal filed under Section 107(1) or 107(2) of the APGST Act would have to be filed either within three months or six months respectively and the appellate authority would be entitled to condone a further delay of one month beyond the period specified above.

10. The applicability of the provisions of Section 29(2) of the Limitation Act, in relation to period of limitation, set out in special or local laws, has been considered by a long line of decisions by the Hon’ble Supreme Court.

11. The first judgment, of import, by the Hon’ble Supreme Court is Vidyacharan Shukla vs. Khubchand Baghel and Ors.,⁸. In this case, the election of the appellant, to the Lok Sabha in the third general elections, was challenged before the Election Tribunal. Upon the election petition being dismissed, the respondents had filed an appeal to the High Court and the same came to be allowed. Aggrieved by the said decision of the Hon’ble High Court of Madhya Pradesh at Jabalpur, the appellant had approached the Hon’ble Supreme Court. The only question, raised before the Hon’ble Supreme Court, was the question of limitation. It was the case of the appellant that the time for filing an appeal was 30 days under Section 116-A(3) of the Representation of Peoples Act, 1951 whereas the appeal was filed beyond that period. It was admitted on both sides, that certain time was taken for obtaining the certified copy of the order of dismissal, and if this time was excluded, the appeal would be within 30 days. The respondents contended that Section 12 of the Limitation Act required that the period taken for obtaining a certified copy would have to be excluded. This raised the question of whether Section 12 of the Limitation Act could be pressed into service by the respondents.

12. A Constitution Bench of the Hon’ble Supreme Court delivered a judgment wherein four learned Judges delivered a majority judgment while Justice K. Subba Rao, delivered a concurrent judgment. However, there was a difference of opinion about the interpretation of Section 29(2) of the Limitation Act. At that point of time, Section 29 (2) of the Limitation Act read as follows:

Section 29(2) Where any special or local law prescribes for any suit appeal or application a period of limitation different from the period prescribed there for by the First Schedule the provisions of Section 3 shall apply, as if such period were prescribed there for in that Schedule, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law—

(a) the provisions contained in Section 4, Sections 9 to 18, and Section 22 shall apply only insofar as, and to the, extent to which, they are not expressly excluded by such special or local law; and

(b) the remaining provisions of this Act shall not apply.

13. Section 29(2) was analyzed, in both the majority and the concurrent judgments to consist of two parts. The first part is said to have ended with the words ―prescribed therefore in the schedule‖ and the second limb is said to have commenced from ―and for the purpose of”. The difference of opinion arose as to whether the word ―and” should be read to mean that the entire provision should be read as one whole or whether the second limb was independent and controlled the first limb.

14. The Hon’ble Supreme Court considered an earlier judgment of a Full Bench of the Allhabad High Court in Sehat Ali Khan vs. Abdul Qavi Khan⁹, wherein the majority view was that the two parts of the sub­section were independent of each other while the dissenting judgment held that both should be read together as an integrated provision.

15. The majority judgment of the Hon’ble Supreme Court accepted the dissenting judgment of the Allahabad High Court, while the learned Judge delivering the concurrent judgment, in the Hon’ble Supreme Court, had accepted the view of the majority judgment of the Allahabad High Court.

16. The difference in opinion, in the judgment of the Hon’ble Supreme Court, need not detain us, as both came to the conclusion that the appeal filed by the respondents, before the Hon’ble High Court of Madhya Pradesh was within time, though for different reasons.

17. After this judgment, the Hon’ble Supreme Court again came to consider the applicability of Section 29(2) of the Limitation Act on the U.P. Sales Tax Act, in Commissioner of Sales Tax, U.P. vs. Madan Lal Das & Sons, Bareilly. In this case, the Hon’ble Supreme Court while considering Section 10 of the U.P. Sales Tax Act, which prescribed a limitation, for filing a revision, had considered whether Section 12 of the Limitation Act could be applied, for excluding the time taken for obtaining certified copies. The Hon’ble Supreme Court, independent of the judgment of the Hon’ble Supreme Court in Vidyacharan Shukla vs. Khubchand Baghel and Ors., held that Section 12 of the Limitation Act would be applicable as the language of Section 10 of the U.P. Sales Tax Act did not exclude the provisions of the Limitation Act.

18. Thereafter, the Hon’ble Supreme Court again considered the question of the applicability of Section 29(2) to the provisions of the Kerala Buildings (Lease and Rent Control) Act, 1965. Section 18 of the Kerala Lease Control Act prescribed a period of 30 days for filing an appeal against an order of Rent Control Court. The said 30 days to be computed, from the date of order of Rent Control Court. The Hon’ble Supreme Court going through the provisions of Section 18 of the Kerala Act, had held that the said provision merely stipulated a period of limitation without going into the power of the Court to condone any delay in filing of such appeal. In such circumstances, the Hon’ble Supreme Court held that there is no express or implicit exclusion of the provisions of the Limitation Act and consequently Section 5 of the Limitation Act would be applicable and the appeals could be filed beyond the period of limitation set out in the Kerala Act, provided sufficient cause is shown, in terms of Section 5 of the Limitation Act.

19. The question of applicability of Section 29(2) of the Limitation Act to the provisions of Arbitration and Conciliation Act, 1996, was again considered by the Hon’ble Supreme Court in Union of India v. Popular Construction Co. The Hon’ble Supreme Court considered the question of whether an application under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award, could be filed beyond the period stipulated under Section 34 of the Act.

20. Under Section 34 of the Arbitration Act, an application for setting aside an arbitral award could be filed within three months from the date on which the arbitral award is received by the applicant or the date on which a request under Section 33 of the Arbitration Act has been disposed of by the Arbitral Tribunal. The proviso to Section 34 (3) permitted the applicant to file the application beyond the period of three months. However, such application would have to be filed within a further period of 30 days, if the Court was satisfied that the applicant was prevented by sufficient cause from making the application within the aforesaid period of three months.

21. The Hon’ble Supreme Court, after considering the judgment of the Constitution Bench in Vidyacharan Shukla vs. Khubchand Baghel and Ors., and other judgments, had held, following the judgment of the Hon’ble Supreme Court in Hukumdev Narain Yadav v. Lalit Narain Mishra¹⁰ that where the language of the legislation, excluded the applicability of the provisions of the Limitation Act, by necessary implication, any benefit under the provisions of the Limitation Act cannot be claimed. On that basis, the Hon’ble Supreme Court had held, in that case, that the filing of the application under Section 34 was beyond the time set out under Section 34 of the Arbitration Act, and would not be maintainable.

22. In Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and Ors.,¹¹ the Hon’ble Supreme Court considered the applicability of Section 14 of the Limitation Act, in relation to an application made under Section 34 of the Arbitration Act. In this case, an application under Section 34 of the Arbitration Act was made, to a Court, against an arbitral award. Subsequently it was realized that the said Court did not have jurisdiction and the application was moved before the competent Court. This was objected by the respondent, on the ground that Section 14 of the Limitation Act would not be applicable, in view of the judgment of the Hon’ble Supreme Court in Union of India v. Popular Construction Co., excluding the applicability of Section 5 of the Limitation Act. The Hon’ble Supreme Court held that, the language of Section 34 of the Arbitration Act, by implication, excluded the applicability of Section 5 of the Limitation Act. However, the said language cannot be extended to exclude the provisions of Section 14 of the Limitation Act, as the language in Section 34 does not lend itself to such exclusion.

23. In Superintending Engineer / Dehar Power House Circle Bhakra Bea Management Board (PW) Slapper and Anr., vs. Excise and Taxation Officer, Sunder Nagar / Assessing Authority, the Hon’ble Supreme Court was considering the applicability of Section 29(2) to Section 45 of the Himachal Pradesh Value Added Tax Act. Section 45 of the Act provided for an appeal against an original order, within 60 days or such extended period as the appellate authority may allow, for reasons to be recorded in writing. The Hon’ble Supreme Court after considering various judgments of the Hon’ble Supreme Court, including the aforesaid judgments, referred to above, had held that the provisions of Section 45 permitted filing of an appeal within 60 days or such more extended period, as the appellate authority may allow, and had held that Section 45 read with Section 48 of the said Act nowhere expressly or by implication exclude the applicability of the Limitation Act and had held that the provisions of Section 5 of the Limitation Act would be applicable in relation to filing of revisions under the Himachal Pradesh Value Added Tax Act.

24. In the case of Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur and Ors., the Hon’ble Supreme Court considered the applicability of Section 29(2) of the Limitation Act to the provisions of Section 35 of the Central Excise Act. Section 35 of the Central Excise Act provided for an appeal to be filed, before the Commissioner (Appeals), within 60 days from the date of communication, of the decision against which the appeal is being filed. The proviso to Section 35 permitted the Commissioner (Appeals), if he was satisfied that sufficient cause is made out, to permit filing of an appeal within a further period of 30 days beyond the statutory provisions of the Limitation Act. It was held that, the affected party cannot invoke Section 5 of the Limitation Act.

25. Though Section 29 (2) requires an express exclusion to be found in the special or local law, the Hon’ble Supreme Court, in Union of India v. Popular Construction Co. had held that where the language of the legislation, excluded the applicability of the provisions of the Limitation Act, by necessary implication, any benefit under the provisions of the Limitation Act cannot be claimed. In view of this ratio, it is not necessary that there should be an express exclusion of the provisions of section 4 to 24 of the limitation Act. An exclusion can also be inferred from the language of the special or local law. A similar view taken by the Hon’ble Supreme Court, in Commissioner of Customs and Central Excise & Customs v. Hongo India (P) Ltd., is extracted below:

35. It was contended before us that the words ―expressly excluded‖ would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. In this regard, we have to see the scheme of the special law which here in this case is the Central Excise Act. The nature of the remedy provided therein is such that the legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation. In other words, the applicability of the provisions of the Limitation Act, therefore, is to be judged not from the terms of the Limitation Act but by the provisions of the Central Excise Act relating to filing of reference application to the High Court.

26. There is another aspect of the matter that needs to be considered. Would exclusion, by necessary implication, of one provision of any of Sections 4 to 24, automatically exclude all the other provisions? This has to be answered in the negative, in view of the judgment of the Hon’ble Supreme Court in Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and Ors. The Hon’ble Supreme court, after considering the earlier judgment in Union of India v. Popular Construction Co., excluding the applicability of Section 5 of the Limitation Act, in relation to appeals filed under Section 34 of the Arbitration and Conciliation Act, 1996, had held that the provisions of Section 14 of the Limitation Act are not excluded by any of the provisions of the Arbitration and Conciliation Act, 1996. This different treatment, accorded to different provisions, makes it clear that there has to be independent consideration of the question of exclusion of each provision.

27. Where a special or local law, by express statement excludes all or any of Sections 4 to 24 of the Limitation Act, they cannot be applied to any proceedings under such special or local law. Where such exclusion is to deduced, by way of necessary implication, each provision would have to be considered separately and exclusion of one provision would not result in exclusion of the other provisions of section 4 to 24 of the limitation Act.

28. In the present case, Section 107, which provides for an appeal against orders passed under the APGST Act, stipulates that (A) an appeal, under Section 107 (1), by a dealer against any order of an adjudicating authority, can be filed within three months from the date on which the order is communicated; (B) an appeal, under Section 107 (2), by an authority under the Act, against any order of an adjudicating authority, can be filed within six months from the date on which the order of the Chief Commissioner directing the filing of such an appeal is received by the said authority. Section 107 (4) authorizes the appellate authority to receive such appeals, beyond the above periods, if the appellate authority is satisfied that the appellant was prevented, by sufficient cause, from presenting the appeal within the prescribed time. However, this power to permit filing of appeals beyond the prescribed time is restricted to condoning delay of one month only.

29. The Hon’ble Supreme Court, while considering similar provisions, in Union of India v. Popular Construction Co and Singh Enterprises  Commissioner of Central Excise, Jamshedpur and Ors., had held that the restriction of the additional period, for which delay may be condoned, in the special statute, effectively excluded Section 5 of the Limitation Act.

30. In Superintending Engineer / Dehar Power House Circle Bhakra Beas Management Board (PW) Slapper and Anr., vs. Excise and Taxation Officer, Sunder Nagar / Assessing Authority, the Hon’ble Supreme Court was considering an open ended power to condone delay and had held that Section 5 of the Limitation Act would be applicable.

31. Since the period of limitation available, under Section 107 of the APGST Act, cannot be extended beyond the period stipulated therein, Section 5 of the Limitation Act would stand excluded.

32. The appellate authority under Section 107 of the APGST Act would not have any power to condone the delay in filing an appeal, under Section 107 of the APGST Act, beyond the period of 30 days set out in Section 107(4) of the APGST Act.

33. Consequently, these Writ Petitions are dismissed. There shall be no order as to costs.

34. Before parting with these cases, this court would also like to place on record it’s appreciation of the fair assistance extended by Ms. Jyothi Ratna Anumolu and Sri T.C.D. Sekhar, the learned Government pleader for Commercial Taxes.

As a sequel, pending miscellaneous applications, if any, shall stand closed.

Noted:-

¹ (2001) 8 SCC 470

² (1976)4 SCC 464

³ (2020) 17 SCC 692

⁴ (2008)3 SCC 70

⁵ (2009) 5 SCC 791

⁶ (2023) 118 GSTR 388 (Kerala = ILR 2023 (3) Kerala 480

⁷ Neutral Citation No.2023:DHC?2502-DB

⁸ (1963) SCC Online SC 122 = AIR 1964 SC 1099

⁹ ILR (1956) 2 ALL 252

¹⁰ (1974) 2 SCC 133

¹¹ (2008) 7 SCC 169 = 2008 SCC Online SC 618