Case Law Details
Jose Joseph Vs Assistant Commissioner of Central Tax And Central Excise (Kerala High Court)
GST Limitation Period Linked to Portal Upload, Rules Kerala High Court – Kerala High Court Clarifies GST Appeal Limitation Period
The Kerala High Court recently addressed a significant issue concerning the limitation period for filing GST appeals. The judgment emphasized that the limitation period under Section 107 of the Central Goods and Services Tax Act, 2017, begins only after the adjudication order is uploaded on the GST portal.
The case involved four writ petitions filed by Jose Joseph, who challenged the rejection of his GST refund appeals on the grounds of delay. These appeals pertained to the refund of unutilized input tax credit for the months of July to October 2017.
Background of the Case
The petitioner, Jose Joseph, claimed that the adjudication orders rejecting his refund applications were not uploaded on the GST portal, a mandatory step for filing electronic appeals. The petitioner stated that he received a physical copy of the orders on April 10, 2019. Due to this delay, he filed his appeals manually in January 2020, resulting in a delay of 184 days.
The appellate authority dismissed the appeals, arguing that the limitation period began with the physical receipt of the order. Under Section 107(1) of the CGST Act, appeals must be filed within three months, with an additional one-month grace period for condonation. The authority held that the appeals were time-barred as they were filed beyond this condonable period.
Court Observations
Justice A. Krishnan noted several key points during the hearing:
- Start of Limitation Period: The court held that the limitation period commences only when the adjudication order is uploaded on the GST portal, as per the procedural mandate under Rule 108 of the CGST Rules.
- Technical and Procedural Gaps: The court acknowledged that the new GST regime faced technical challenges during its transition phase. This justified a more lenient approach towards procedural lapses.
- Absence of Manual Appeal Provisions: The CGST Rules specify electronic filing for appeals. Without explicit provisions for manual filing, taxpayers cannot be penalized for delays caused by administrative lapses like non-uploading of orders.
The court referenced similar rulings, including the Gujarat High Court’s decision in Gujarat State Petronet Ltd. v. Union of India (2020), which also addressed procedural delays during GST’s initial implementation.
Key Ruling and Implications
The Kerala High Court ruled in favor of the petitioner, setting aside the appellate authority’s order. The court directed the authority to treat the manually filed appeals as submitted within the limitation period and to proceed with the appeals on their merits.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
These four writ petitions are filed by the same petitioner seeking identical reliefs based upon similar causes of action, for different months of the same assessment year. He is aggrieved by the rejection of his appeals on the ground of limitation.
2. The issue involved in the appeals related to the claim for refund of unutilized input tax credit for the months of July, August, September and October, all of the year 2017. The assessing authority partly rejected the claim for refund by Ext.P1 order produced in each of the writ petitions dated 29.03.2019 and 03.04.2019.
3. The grievance of the writ petitioner arises from the allegation that Ext.P1 order was never uploaded in the web portal of the respondents and hence, the petitioner could not file appeals in the electronic form, which is mandated as per the present provisions of law. According to the petitioner, Ext.P1 order was communicated to him only on 10.04.2019 and instead of filing the appeals in the electronic form, petitioner preferred appeals in the physical form, but in so doing, a delay occurred. The 2nd respondent, as the Appellate Authority, rejected the appeals by Ext.P3 order, produced in each of the writ petitions, on the ground that the appeals are barred by limitation and that there is no provision for condoning the delay of more than 30 days.
4. Petitioner contends that since Ext.P1 order was never uploaded in the web portal, petitioner could not have, under any circumstances, preferred an appeal in the electronic form, that too, within the time prescribed. Relying upon the judgment of the Gujarat High Court in Gujarat State Petronet Limited v. Union of India through Secretary (SCA No.15607 of 2019), it is contended that the order of the Appellate Authority is liable to be set aside and the appeals ought to be considered on merits.
5. A statement has been filed by the respondents contending that once the module for filing the GST is available in the GST portal, an appeal can be filed only in the electronic form. However, in order to minimize the difficulties for the assessees, appeal in the manual form was also accepted and even processed manually. Respondents further stated that, even while filing the appeal in the manual form, there was a delay of more than 180 days and that, on a combined reading of section 107(1) and section 107(4) of the Central Goods and Services Tax Act, 2017 (for short ‘the Act’), the appeal ought to have been filed within three months from the date on which the order impugned is communicated and if the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, then the Appellate Authority was entitled to condone the delay up to a further period of one month. The respondents contended that the appeals were filed beyond 153 days, after the expiry of the condonable period of 30 days.
6. I have heard the arguments of Sri. A.Krishnan, learned counsel for the petitioner, Smt. Kaveri S. Thampi, learned Standing Counsel for respondents 1 and 2 and Sri. S. Manu, learned Assistant Solicitor General of India for the 3rd
7. Section 107(1) of the Act contemplates the filing of an appeal within three months from the date on which the decision or order is communicated to such person, while under section 107(4) of the Act, the period for presenting the appeal can be extended by a further period of one month, if sufficient cause is shown by the appellant. By the provisions of Rule 108(1) of the Central Goods and Services Tax Rules, 2017 (for short ‘the Rules’), the appeal has to be presented in Form GST APL-01, along with the relevant documents, either electronically or otherwise, as may be notified by the Commissioner.
8. It is the admitted case of both the petitioner and the respondents that the orders impugned in the appeals, though dated 29.03.2019, were never uploaded in the web portal to enable the petitioner to prefer the electronic filing of appeals, as prescribed. There is no quarrel that the Commissioner has not issued any notification specifying any other form of appeal. However, on the basis of receipt of a copy of the order on 10.04.2019, the petitioner preferred appeals manually only on 09.01.2020, with a delay of 184 days. Thus, after referring to the decision in Debabrata Mishra v. Commissioner of Central Tax and GST [2020 (36) G.S.T.L. 325 (Ori)] as well as the judgment in Assistant Commissioner (CT), LTU, Kakinada & Ors. v. Glaxo Smith Kline Consumer Health Care Limited [2020 (36) G.S.T.L. 305], the Appellate Authority dismissed the appeals as time-barred.
9. While dismissing the appeals as time-barred, the Appellate Authority went in a mechanical manner without appreciating that the orders that were impugned before the Appellate Authority, though required to have been uploaded in the web portal, were never uploaded. The period of limitation will start to run, as per the provisions of the Act, only when the order is uploaded in the web portal and not when the order is received in the physical form by the petitioner. When admittedly there was a failure on the part of the respondents to upload the order in the original, petitioner cannot be mulcted with the responsibility of preferring appeals within the time period stipulated. The time period stipulated in the statute for filing an appeal is part of the same transaction that exists with the uploading of an order in the original.
10. When the mode of appeal prescribed by Rules is only the electronic mode, the time limit of three months can start only when the assessee had the opportunity to file the appeal in the electronic mode. The assessee cannot be blamed if he waited for the order to be uploaded to the web portal, even if he had in the meantime received the physical copy of the order. The reliance upon Annexure R1(c) circular have no bearing on the case of the assessee as the same is at the most only an internal communication and not made known to the public and cannot be treated as a notification contemplated under Rule 108(1) of the Rules.
11. In this context, it is appropriate to notice that there is no provision for filing an appeal manually. In the absence of such a provision, even though the petitioner has preferred appeals in the manual form subsequently, the same cannot work out as a prejudice to the petitioner to apply the period of limitation from the date of serving of physical copy of the order.
12. Cases of this nature are occurring on account of the transition phase brought in by the new regime of GST and technical glitches that are occurring in the transition phase. In such circumstances, a different approach is required, especially since the electronic mode of uploading the order and the electronic filing of appeal had not attained its technical perfection, at least till the recent past.
13. In a similar instance, the High Court of Gujarat, while considering Gujarat State Petronet Limited v. Union of India (2020 (41) G.S.T.L. 442) had by judgment dated 05.03.2020 set aside the order of the Appellate Authority, and ordered the delay to be condoned in preferring the appeal manually and remanded the matter back for fresh consideration of the appeal. The observations of the Court are relevant in this context: “ 8. On a perusal of the above provisions, it is apparent that the appeal is required to be filed in electronic mode only and if any other mode is to be prescribed then the same is required to be notified by way of a notification. There is nothing on record to show that any notification has been issued for manual filing of an appeal. In such circumstances, though the physical copy of the adjudication order was handed over to the petitioner, the time period to file appeal would start only when the order is uploaded on the GST portal. Without the order being uploaded, the petitioner could not file the appeal and therefore, the contention raised on behalf of the respondents that the uploading of the order and filing of the appeal are two different processes, is not tenable in law. Moreover, filing of the appeal and uploading of the order are intertwined activities. The order is required to be uploaded online so that the appeal can be filed electronically as per the mandate of the provisions of the Act and the Rules. However, there is no provision or procedure to file the appeal manually. In such circumstances, there was no failure on part of the petitioner to file the appeal within the prescribed period of limitation as the period of limitation did not start till the order passed by the adjudicating authority was uploaded on the GST portal. Merely because the petitioner has filed the appeal manually, after exhausting all the efforts to ensure filing of the appeal and proper and legal manner, the impugned order rejecting such appeal on the ground of limitation is not sustainable the petitioner cannot be penalised for lack of clarity of the provision in the new law is enacted.”
14. I concur wholly with the aforesaid observations in the said judgment.
15. Hence, I am of the view that the petitioner is entitled to have his appeals that were filed manually, to be treated as having been filed within time, in the light of the failure of the department to upload Ext.P1 order in the web portal. Therefore, Ext.P3 order passed by the 2nd respondent in all these writ petitions are set aside and the 2nd respondent is directed to treat the appeals as filed within time and thereafter, to pass final orders in the appeals on merits, after affording sufficient opportunity of hearing to the petitioner.
The writ petitions are allowed as above.
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