The resurgence of COVID-19 pandemic recently headed different regions/states of India into lockdown which escalated difficulties in instituting the cases and filing applications in the courts at all levels. The Supreme Court Advocate on Record Association (SCAORA) took note of such a daunting situation before the litigants and filed the interlocutory application before the Supreme Court to restore the order dated 23.03.2020 passed last year in the SMW(Çivil) No. 03/2020.
The Hon’ble Supreme Court promptly acceded the prayer of the Association and pleased in passing the order dated 27.04.2021 and the operative part may be read as under;
“We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders.
It is further clarified that the period from 14th March,2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
We have passed this order in exercise of our powers under Article 142 read with Article 141 of the Constitution of India. Hence it shall be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities.”
That on the other side in Goods and Service tax matters, on the Council recommendation, the Government invoked the provision contained in the section 168A of the CGST Act and issued Notification No. 14/2021-CT dated 01.05.2021 to defer the limitation period till 31.05.2021 in respect of specified time limit for completion or compliances of any action by any Authority or by any person falls during the period from 15.04.2021 to 30.05.2021. The notification in extending the scope in inclusive manner encompasses the following actions attributable to any Authority, Commission or Tribunal under the GST Act;
(i) Completion of any proceedings,
(ii) Passing of any order,
(iii) Issuance of any notice, intimation, sanction or approval
(iv) Such other action by whatever name called
(v) Verification u/r 9 and passing order u/s 54(5) or (7).
Per contra, the actions due on the part of the person(taxpayer)
(i) Filing of any appeal, reply, application,
(ii) Furnishing any report, document, return, statement or such other record, by whatever name called under the Act.
In the notification, a few exceptions have been drawn which are hereby parked aside as not relevant in the flow of the discussion.
Here the availability of two parallel authorities extending timelines imparted the conundrum amongst the stakeholders about the sustainability of the notification on the common subject in so much as allowing restricted limitation period in the notification in the face of open ended limitation period ordained in the Supreme Court order and here in the coming para, attempts have been made to reconcile both the remedies.
The perusal of both pieces of legislation, the term “all judicial or quasi-judicial proceedings” is pivotal in the Supreme Court order to understand the applicability upon the notification. The notification very extensively tried to bring almost all actions in its sweep but for the sake of drawing the comparison, these all may be bifurcated in two baskets, first compliance of prescribed rules and second one proceeding. In ordinary parlance, compliance shall cover the obeyance of the provisions of the law in which obligations have been prescribed and the person/authority is duty bound to act upon such obligations in own motion. The moment, such obligations are not fulfilled or violation of prescriptions takes place, the cause of action arises to the person/authority to take action in the law to safeguard their respective interests and enforcement of legal rights which in common parlance shall fall under the proceedings.
In the above discussion, it is amply clear that barring obligation to file the periodic returns by the assessees and fulfilment of obligations due on the part of authorities, all items mentioned in the notification are in the nature of proceedings before the departmental Authority, therefore being covered under the aegis of the quasi-judicial proceedings, these proceedings are entitled to get benefit out of the Supreme Court order dated 27.04.2021
INTENTION TO ADD QUASI-JUDICIAL PROCEEDINGS
In the foregoing para, it is clear that Supreme Court order and Notification hold concurrent jurisdiction over the quasi-judicial proceedings, thereby it is to be understood which piece of legislation shall prevail in extending the limitation period in the Goods and Service Tax related proceedings. In this regard at the threshold, it is advisable to see the intention of the Supreme Court which may be understood just by drawing a comparison with the last year order dated 23.03.2020 in which period of limitation prescribed under the general law or special law in respect of the “proceedings in respective Courts/Tribunals across the country including this Court” has been extended. In contrast, unlike last year order, in the order dated 27.04.2021, the term “……..quasi-judicial proceeding” has been appended. Thereby the addition of the term “quasi-judicial proceedings” is a clear manifestation of the Apex Court intention to extend the open ended limitation period to the proceedings before the quasi-judicial authorities also. In such legal preposition, denial of the longer limitation period in terms of the order dated 27.04.2021 to the proceedings before department authorities, would be dishonouring of the Apex Court intention.
ORDER PASSED UNDER ARTICLE 142
The Supreme Court in its both respective orders dated 23.03.2020 and 27.04.2021 has precisely mentioned that the order is being passed in exercise of powers under Article 142 read with Article 141 of the Constitution of India. The coupling of Article 142 with Article 141 from a binding perspective, makes all difference by leaving no room for deviation as the Supreme Court in the exercise of its jurisdiction is empowered to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it. The gravity of such empowerment may be understood with the help of landmark judgments as in the very recent past, Article 142 was invoked precisely in the majority unanimous verdict in the Ram Janmabhoomi-Babri Masjid land dispute case titled M Siddiq(D) v/s Mahant Suresh Das & Ors [CA 10866-10867/2010] . It also happened in 2016 in the matter of the State of Tamilnadu v/s K Balu & Anr [CA 12164-12166/2016] when Article 142 was invoked to put a ban on the sale of alcohol within a stipulated distance of 500 meters from the outer edge of the highway to avoid accidents due to drink and drive. A little more in past, in 1989, the Hon’ble Supreme Court invoked Article 142 during the case of Union Carbide Corporation v/s UOI [(1991) 4 SCC 584] in providing relief to the thousands of people who were affected during the black night of Bhopal Gas Tragedy and in the said judgment, the Hon’ble Supreme Court while awarding the compensation of $470 million to victims observed that to do “complete justice” it could even override the laws made by Parliament.
Besides above discussed milestone judgments, there are several other precedents of invocation of Article 142 where the unfettered position of law emerged that the plenary power of the Supreme Court under Article 142, embodies both the notion of justice, equity, and good conscience as well as a supplementary power to the court to effect complete justice. In such settled position of law, palpably the parliamentary laws appeared to have paved the path for passing the order meant for doing the complete justices by the Supreme Court in facts and circumstances of each case and here may be perused to adjudge the enforceability of the orders passed by exercising the power under Article 142 in contrast to the extension of the limitation period in a restricted manner in the Goods and Service Tax matters in terms of the parliamentarian law namely CGST Act.
Amidst the ongoing ambiguity, there are few recent precedents holding persuasive value and one out of them is worth reading which came in the matter of Sree Sai Lakshmi Padmavati Dal Mills v/s Commercial Tax Officer [Judgment dated 21.04.2021 in WP 4286/2021 ] before the hon’ble Andhra Pradesh high court in which the sequence of events started when the Assessing Authority passed an assessment order dated 30.07.2016 under the AP VAT Act,2005 which was challenged before the Appellate Authority who vide order dated 27.04.2017 remanded the matter to the lower Assessing Authority. In the remand proceedings, the show cause notice was issued and replied in the due course, and eventually, the personal hearing took place on 12.03.2020 in which petitioner sought the time, thereby the matter stood posted to 20.03.2020 where the petitioner on this date requested to grant four working days time for furnishing necessary information of the customers. After making prayer for granting time, the petitioner could not approach the Assessing Authority due to the onset of Covid-19 pandemic which resulted in a passing assessment order dated 31.03.2020 by the Assessing Authority.
In the above stated given facts, the petitioner instead of invoking appellate provisions in section 31(1) of the AP VAT Act,2005 within 30 days, preferred the subject writ petition in February,2021 to challenge the assessment order dated 31.03.2020 by placing reliance upon the Supreme Court order dated 23.03.2020 and in proceedings the Supreme Court order dated 08.03.2021 also. Here at this stage, the short question was to decide whether a writ petition is liable to reject in view of regular appellate provisions in place in the Act or otherwise benefit of the relied upon Supreme Court orders is to be extended.
The Hon’ble High Court felt no hesitation in allowing to avail appellate remedy within two weeks without having any regard to the provisions of Section 31 of the AP VAT Act, 2005 in view of the order of the Supreme Court orders.
In another precedent, the CBDT vide Circular No. 08 dated 30.04.2021 extended the timelines related to the filing appeal to the Appellate Authority and other certain compliances by the Taxpayers under the Income Tax Act 1961 in view of the severe pandemic situation till 31st May,2021. This restricted timeline extension was challenged before the Madhya Pradesh High Court in the matter of Palak Agrawal v/s Central Board of Direct Taxes [WP 9380/2021] wherein on listing the case on 24th May,2021, the matter adjourned to 27th May,2021 on the Revenue Counsel statement that CBDT shall consider the Supreme Court order and will take appropriate decision for extending the period of limitation for filing the appeal. The swift effect of such court proceeding was seen on the very next date when the CBDT modified the earlier instructions by Circular No. 10/2021 dated 25th May,2021 to clarify that if different relaxations are available to the taxpayers for particular compliance, the taxpayer is entitled to the relaxation which is more beneficial to him and, for filing of appeals before the CIT(Appeals) under the Act, said limitation stands extended till further orders as ordered by the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) NO.3 of 2020 vide order dated 27th April 2021.
CLARIFICATION NOT ENOUGH TO SETTLE DOWN
In the initial para, the timelines extended by the Government in the Goods & Service Tax matters vide Notification No. 14/2021-CT dated 01.05.2021 have been discussed. In the latest GST Council Meeting held on 28th May,2021, the time limits for completion of various actions, by any authority or by any person, under the GST Act, have been further extended upto 30th June, 2021. Here it is worth noting that the Press Release while apprising the Council Meeting decisions regarding another extension, added the clarificatory note that “wherever the timelines for actions have been extended by the Hon’ble Supreme Court, the same would apply”.
The clarification came in the 43rd GST Council Meeting Press Note appears to clear all disputes in the manner that the notification issued under section 168A of the CGST Act providing restricted timeline extension on the matters covered by the Supreme Court Orders, does not hold the ground and the assessees are entitled to the larger limitation period right from beginning i.e. 15.03.2020 in terms of the first Order dated 23.03.2020. Nonetheless, such clarification, is not as simple as seems, because the notification issued in persuasion to the GST Council meeting decision, lacks any reference of the Supreme Court orders.
Taking altogether above issues, another round of dispute would also start, which items of the Notification No. 14/2021-CT dated 01.05.2021 are covered by the Supreme Court orders. In this regard, it is to be noted that the Order dated 27.04.2021 restored the earlier order and extended the limitation period under any general or special laws in respect of all judicial or quasi-judicial proceedings. Unlike earlier order, in the operative part of the order dated 27.04.2021, there is no individual mention of “petitions/ applications/ suits/appeals/all other proceedings” but as the earlier order has been restored, thereby without the pale of doubt it is amply clear that these individual matters are in the sweep of all judicial or quasi-judicial proceedings.
The petitions, suits and appeal are well understood terms but the grey area starts by taking the scope of the “application” and “other proceedings”. In this regard here two interpretations are possible, first by applying the ejusdem generis rule, the term application and proceedings would get their color from juxtaposed words, thereby the “application” and “proceedings” would be a relative term as to arising out of the petition/ suit and appeal but another interpretation is also possible as to read application and proceedings independently. The independent interpretation shall enable the assessee in bringing all non-litigated matters (except return filing and exceptions) prescribed under Notification No. 14/2021-CT dated 01.05.2021 under the aegis of Supreme Court order. Though there is no dispute over litigate matters as easily covered under the umbrella of petition, suit or appeal. Non litigate matters attributable to the Authority may be such as an adjudication of assessee claim, issuance of notice, intimation, notification, sanction or approval etc. while filing reply to notice, refund applications and re-filing, supplying records, documents or statements against summons, may fall under the application and proceedings from the assessee perspective.
Here as to understand the term proceedings, the findings of Appellate Authority decision in the matter of ID Fresh Food (India)Pvt Ltd [2020(42) GSTL 136(App. AAR-GST-Kar)] may be helpful as in this matter the term ‘proceeding’ has been defined as is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right and hence it necessarily embraces the requisite steps by which judicial action is invoked and commencement of investigation in terms of Section 67 of Central Goods and Services Tax Act, 2017 can be said to be the start of a proceeding to safeguard the Government revenue.
Further at this juncture, the directions dated 7th April,2021 issued by the Commissioner of Commercial Tax Department, Chennai may fortify the contention to treat application and proceedings independently. As in this departmental direction, in the light of the Supreme Court order dated 8th March,2021 in SMWP(C) No. 03/2020, the instructions have been issued to extend the stipulated 30 days’ time to file the application in REG-21 for revocation of registration by excluding the period from 15.03.2020 to 15.03.2021. The appellate authorities in the same communication have been directed to take the appeals against the registration cancelation orders if the appellate period prescribed u/s 107 of CGST Act is available on 15th March,2021 by excluding the period from 15.03.2020 to 14.03.2021.
In the above discussion, it is all possible that the department shall go by the first thought of interpretation that the “application” and “proceedings” are relative term as to arising out of the petition/ suit and appeal while there shall be assessee’s endeavour to bring applications and proceedings in the sweep of twin Supreme Court orders.
In view of the above discussion, it is not difficult to conclude that the issue in so far as applicability of Supreme Court order on the application or proceedings is not going to settle down immediately without indulging in another multiple rounds of litigation in the court of law.