Introduction: The Madras High Court recently addressed a significant matter concerning the Goods and Services Tax (GST) regime, focusing on the condonation of delay in filing an appeal. The case, Tvl. GT India (P.) Ltd. Vs State Tax Officer, revolves around the petitioner’s delay in appealing against an order due to late awareness of said order, only coming to light upon receipt of a recovery notice. This scenario sheds light on the procedural aspects of GST appeals and the judiciary’s stance on safeguarding taxpayer rights.
Background and Issue at Hand: The petitioner, a registered taxpayer under the GST Act, faced an order passed by the State Tax Officer, which they sought to challenge. However, the appeal was delayed due to the petitioner’s late discovery of the order, which was only realized upon receiving a recovery notice. The central issue was whether such a delay, caused by the petitioner’s unawareness of the order, could be condoned, allowing them to proceed with the statutory appeal.
Court’s Observations and Ruling: The Madras High Court meticulously analyzed the sequence of events leading to the delay. Notably, the assessment order was passed on the same day the petitioner submitted their reply to the show cause notice, contrary to the petitioner’s expectation that the order would follow the stipulated reply period. This unusual timing contributed to the petitioner’s delayed awareness and subsequent appeal filing.
In considering the reasons for the delay, the court found them to be reasonable, emphasizing that the right to appeal is a fundamental aspect of taxpayer rights that should not be negated by delays beyond their control. Consequently, the court decided to condone the delay, instructing the Appellate Authority to accept and consider the petitioner’s appeal in accordance with the law.
Implications for Taxpayers and the GST Regime: This ruling underscores several critical points relevant to taxpayers and the GST framework:
1. Awareness and Communication: Tax authorities must ensure timely and clear communication of orders to taxpayers, preventing situations that could inadvertently lead to appeal delays.
2. Judicial Support for Taxpayer Rights: The judiciary plays a crucial role in interpreting procedural timelines flexibly, especially when such interpretation supports the fundamental rights of taxpayers.
3. Procedural Fairness: The decision highlights the importance of procedural fairness, allowing taxpayers adequate opportunities to challenge orders they believe to be unjust.
Conclusion: The Madras High Court’s decision to condone the delay in filing a GST appeal due to the petitioner’s late discovery of the relevant order represents a judicious balance between procedural adherence and the protection of taxpayer rights. This ruling serves as a reminder of the judiciary’s role in ensuring that the legal framework, including the GST regime, operates fairly and reasonably, taking into account the practical realities faced by taxpayers. It reinforces the principle that access to justice, including the right to appeal, is paramount and should not be hindered by procedural technicalities.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed to call for the records on the file of the 1st respondent in GST:33AACCG0975D1ZZ/2018-19 dated 2-6-2023 and consequential order passed u/s 73 and Form GST DRC-07 having reference No. ZD3306230120252 both dated 5-6-2023 for the tax period April 2018 – March 2019 relating to the Financial Year 2018-19 and to quash the same.
2. The petitioner is a registered tax payer under GST Act. The 1st respondent issued notices in i) Form GST ASMT-10 dated 22-12-2021, i) Form GST DRC 01A after eight months, on 3-9-2022 and iii) Form GST DRC 01A on 1-6-2023 and for each of the said notices the petitioner filed their respective reply. However, the 1st respondent, without considering the aspect that the claim of ITC was supported by tax invoices and bank statement showing payment inclusive of tax to the suppliers, who are existing registered dealers during the relevant period and without even providing opportunity of personal hearing to the petitioner, passed the impugned order and consequential order u/s 73 confirming the proposal relating to alleged excess claim of Input Tax Credit. Hence, the present writ petition.
3. Today, when the matter is taken up for hearing, the learned counsel appearing for the petitioner would submit that though the petitioner sought for a larger relief, now, he would restrict the relief to the extent that it would suffice if this Court passes an order permitting the petitioner to file a statutory appeal.
4. On the other hand, it is the contention of the learned Government Advocate appearing for the respondents that the appeal has been filed with a delay of 69 days, which includes the condonation period and the 39 days mentioned by the petitioner excludes the limitation period of 30 days.
5. In the present case, a show cause notice was issued to the petitioner on 1-6-2023, by virtue of which, the petitioner has to file reply on or before 2-7-2023, however, the petitioner filed their reply on the very next day, i.e. on 2-6-2023 and the respondent passed the assessment order on the very same date itself, i.e. 2-6-2023. Since the petitioner filed their reply on the very same date, on which, notice was issued to the petitioner, i.e. on 1-6-2023, the petitioner was under an impression that the order would be passed after the time limit fixed for filing the reply, i.e. 2-7-2023. However, 1st the respondent passed the assessment order on the very same day, on which, reply was filed by the petitioner i.e. 2-6-2023 and the petitioner came to know about the said impugned order only when the 1st respondent issued recovery notice dated 19-10-2023, which was received by the petitioner on 28-10-2023. Thereafter, the petitioner immediately took steps to file the appeal, however, with a delay.
6. The learned Government Advocate (Taxes) appearing for the respondents would contend that as per the Statute, the delay in filing the appeal will be condoned upto 30 days, however, he submits that if any order is passed by this Court, the same would be complied with by the respondents.
7. Heard the learned counsel appearing for the petitioner as well as the learned Government Advocate (Taxes) appearing for the respondents and perused the materials on record.
8. Taking into consideration of the submissions of the learned counsel appearing for the petitioner as well as the respondents and on perusal of the materials on record, it appears that the reasons assigned by the petitioner for the delay in filing the Appeal are reasonable. Hence, this Court is inclined to condone the delay, as, the petitioner’s right to prefer appeal cannot be deprived of on account of the delay, which has occurred beyond their control. Accordingly, the delay in filing the appeal is condoned.
9. Therefore, the Appellate Authority is directed to entertain the appeal filed by the petitioner and dispose of the same, in accordance with law.
10. With the above direction, this writ petition stands disposed of. Consequently, connected miscellaneous petitions are closed.