Case Law Details
Sri Shanmuga Motors Vs State Tax Officer (Madras High Court)
Summary: In Sri Shanmuga Motors v. State Tax Officer (W.P. No. 11737 of 2024), the Madras High Court addressed the dismissal of an appeal filed by Sri Shanmuga Motors against a tax assessment order dated September 9, 2023. The appeal, initially rejected on January 30, 2024, was dismissed by the Appellate Authority as it exceeded the permissible delay period under Section 107(4) of the CGST Act, 2017. In response, the petitioner sought the Court’s intervention, arguing that the tax assessment invoked Section 74 of the CGST Act improperly, as the necessary conditions were unmet. Despite a 21-day delay beyond the condonable period, the Court deemed this delay minor and directed the appellate authority to hear the case based on its merits rather than dismissing it on procedural grounds. This ruling aligns with similar judgments, such as in Tvl. Sri Sai Traders and Calcutta High Court cases, which underscored the importance of providing appellants with a fair hearing in cases where minor delays occur. However, contrasting views, such as those from the Kerala and Allahabad High Courts, emphasize strict adherence to statutory limits without applying the Limitation Act. The Court’s decision highlights the nuanced approach taken by various judicial bodies in balancing procedural limits with principles of natural justice.
The Hon’ble Madras High Court, in the case of M/s Sri Shanmuga Motors v. State Tax Officer [Writ Petition No. 11737 of 2024 dated June 03, 2024] had set aside the Appellate Order and directed the Department to hear the appeal on merits which has been filed beyond the condonable period for filing of appeal without going into the question of limitation.
Facts:
M/s Sri Shanmuga Motors (“the Petitioner”) filed appeal against Assessment Order dated September 09, 2023 passed by the State Revenue Department (“the Respondent”). Thereafter, the Petitioner filed an appeal before the Respondent Authorities; However, the appeal was rejected by the Appellate Authority vide order dated January 30, 2024 (“the Impugned Appellate Order”). The rejection was based on the ground that the appeal was filed beyond the condonable period prescribed under Section 107(4) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
Issue:
Whether the Appellate Authority is empowered to hear appeal on merits without going into the question of limitation?
Held:
The Hon’ble Madras High Court in the case of Writ Petition No. 11737 of 2024 held as under:
- Noted that, the Petitioner had asserted in the affidavit that the tax liability was imposed despite the ingredients necessary for invoking Section 74 of the CGST Act were not satisfied.
- Held that, the Impugned Appellate Order is set aside as the period of delay beyond the condonable period is only 21 days and directed the Respondent to receive and dispose of the appeal without going into the question of limitation.
Our Comments:
In a Pari Materia case of M/s Tvl.Sri Sai Traders v. Deputy Commissioner (ST), Goods and Services Tax Appeals [Writ Petition No. 12860 of 2024 dated June 07, 2024] the Hon’ble Madras High Court set aside the order rejecting the appeal which was 29 days beyond the three-month limitation and directed the Appellate Authority to consider the appeal on the merits without considering the limitation issue.
The Hon’ble Calcutta High Court in the case of Jayanta Ghosh and Ors. v. State of W.B. [W.P.A No. 230 of 2024 dated March 05, 2024] and Murtaza B Kaukawala v. State Of W.B. And Ors. [MAT/1361/2023 dated October 18, 2023], by invoking Section 5 of the Limitation Act, allowed the appeal filed beyond the limitation period interlalia holding that an Appellate Authority cannot dismiss the appeal on the ground of limitation without granting any opportunity of hearing. The delay can be condoned if the principles of natural justice has been violated by not providing the opportunity of hearing to the Appellant and the period prescribed for filing of appeal is not final.
However, The Hon’ble Kerala High Court in M/s Penuel Nexus Pvt Ltd. v. The Additional Commissioner (Appeals), Cochin [WP(C) No. 15574 of 2023 dated June 13, 2023] held that the Additional Commissioner is right in rejecting the time-barred appeal as section 107 of the CGST Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act, 1963.
Further, The Hon’ble Allahabad High Court in the case of M/s. Yadav Steels v. Additional Commissioner and Anr. [Writ Tax No. 975 of 2023 dated February 15, 2024], dismissed the writ petition, thereby holding that, Section 5 of the Limitation Act would not be applicable for appeal filed under Section 107 of the UPGST Act.FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original was issued against the petitioner on 09.09.2023. Such order was carried in appeal before the 2nd respondent. Such appeal was filed on 30.01.2024. On the ground that the appeal was presented beyond the condonable period, the appeal was rejected. This writ petition is directed against the original order dated 09.09.2023.
2. Although the writ petition is directed against the order in original, learned counsel for the petitioner submits that the petitioner would prosecute the appeal, if the appellate authority is directed to receive and dispose of the same on merits.
3. Mr.V.Prashanth Kiran, learned Government Advocate, accepts notice for the respondents. He points out that the appeal was rejected because such appeal was presented beyond the condonable period prescribed in sub-section 4 of Section 107 of applicable GST enactments.
4. On perusal of the appellate order, it is evident that the delay beyond the condonable period is only 21 days. The petitioner has stated in the affidavit that the tax proposal was confirmed under Section 74 of applicable GST enactments in spite of the fact that the ingredients of Section 74 are not satisfied. By taking this aspect into account and by noticing that the period of delay beyond the condonable period is only 21 days, this writ petition is disposed of by setting aside the appellate order dated 30.03.2024 and consequently directing the 2nd respondent to receive and dispose of the appeal filed by the petitioner on merits without going into the question of limitation. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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